Equity Group’s intention of acquiring four banks from London-listed investment firm Atlas Mara Limited has been stopped, owing to the uncertainty of risk occasioned by the coronavirus pandemic.
In a statement, the Group’s Chief Executive Officer James Mwangi said the two parties have agreed to discontinue discussions on the proposed transaction or a variant of it for the foreseeable future.
Mwangi says the group is currently focused on conserving cash and liquidity, and deploying it to support its customers to survive during the ongoing economic crisis and to recover and thrive post the crisis.
“The Board has considered the events that have taken place since January when the two parties agreed to extend transaction discussions and particularly the impact of the COVID-19 pandemic to the world and the economies in which EGH operates. After careful consideration, EGH and ATMA have mutually agreed to discontinue discussions on the transaction for the foreseeable future,” he said.
He added that the board’s decision to halt the transaction, is in line with its Business Continuity Management that speaks to risk assessment, approach to prudent risk mitigation and management in the prevailing economic slow-down occasioned by the COVID-19 pandemic in the region and globally.
The deal would have seen Equity Group acquire banking businesses from ATMA in Rwanda, Tanzania, Zambia and Mozambique.
In Rwanda, Equity would have acquired 62 percent of the share capital of Rwanda’s Banque Populaire du Rwanda, and a hundred percent of African Banking Corporation Zambia, African Banking Corporation Tanzania and African Banking Corporation Mozambique.
On its end, Atlas Mara was expected to gain shares equivalent to a 6.72 percent stake in Equity Bank valued at Sh10.9 billion.
Earlier this month, Equity Group announced that it had withdrawn the Sh9.5 billion dividend pay-out to shareholders owing to disruptions caused by the virus.