NIGERIA – Access Bank, a multinational commercial bank, has received approval to acquire South African lender, Grobank Limited.
The regulatory support will see the Nigerian bank purchase one of several financial institutions it plans to take over for the acquisition of new clients.
The Herbert Wigwe-led bank plans to wrap up the deal with Grobank by the second quarter of this year, which falls between April to June. The cost of the acquisition is valued at US$26.72 million by GCR Ratings.
South African and Nigerian regulatory authorities have approved the deal, which is expected to favour Grobank, as the South African lender has been struggling financially and in need of capital infusion.
In 2018, according to the GCR report, Grobank had a market capitalisation of US$15.1 billion, but fast forward to three years later, the company is being sold for ZAR400 million (US$26.62m). This will earn Access Bank a 49% majority stake.
Access Bank will take up the liabilities of Grobank after the completion of the deal. Commenting on the advantage of the acquisition, Wigwe said the Nigerian lender’s presence in South Africa will enhance value for shareholders.
“Today’s announcement represents significant progress in delivering on our strategic intent of becoming Africa’s Gateway to the World in pursuit of our vision to be the World’s Most Respected African Bank,” he said.
“Our presence in South Africa will no doubt accelerate the attainment of our goal of delivering our More than Banking promise to 100 million unique customers across the continent.
“It will also build on our existing foundation and deliver enhanced value to our shareholders, employees and other stakeholders.”
Aside from Grobank, Access Bank has made some acquisitions in Kenya, Zambia and also eyeing Mozambique in order to increase its presence in the southern region of Africa. The Nigerian credit firm is in talks with African Banking Corporation through Access Bank Mozambique.
The lender is owned by ABC Holdings, which is under the umbrella of Atlas Mara. Access Bank has, however, purchased Cavmont Bank Limited in Zambia and Transnational Bank in Kenya.
The approved acquisition would enable the bank to further pursue its objectives of business diversification, enhanced operational efficiencies, talent retention, and robust governance.
Grobank in South Africa and Cavmont Bank in Zambia are further indicators of the bank’s presence in the SADC region.
In Nigeria, the bank is looking to transition to a holding financial institution this year which will enable it to open subsidiaries in insurance brokerage and payments.
