The reason for terminating acquisition talks is attributed to the protracted pandemic and the uncertainty that follows. This bank’s decision is in line with the board’s view, media reports said.

Equity Bank Group CEO James Mwangi, told the media, “Board of Directors have agreed to the entry into a binding term sheet through a share swap to exchange certain banking assets of Atlas Mara in four countries for shares in Equity Group.”

In January, it was reported that Equity Group’s plan to acquire four banks in Rwanda, Zambia, Mozambique and Tanzania will delay as the buyout deal was not made within the stipulated deadline. However, Equity and Atlas had planned to continue discussion further in 2020 to reach a mutual deal.

Now the pandemic has forced the bank to change its decision in acquisition plans. With that, the bank is more focused on conserving cash and liquidity to support customers during uncertain times. ”A strong capital and liquidity position gives us the strength and capacity to cushion our business, accommodate and walk with our customers during these challenging times,’’ Mwangi said.

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Investment group Atlas Mara’s African operations include Banque Populaire du Rwanda in Rwanda, African Banking Corporation in Zambia, African Banking Corporation in Tanzania and African Banking Corporation in Mozambique.

Equity’s Atlas Mara acquisition is in line with its pan-Africa expansion strategy. Equity will acquire Atlas Mara through shares. It will get 62 percent of the share capital in Banque Populaire du Rwanda, 100 percent of African Banking Corporation, African Banking Corporation and African Banking Corporation.

Also, Equity is looking to acquire a majority stake in Banque Commerciale du Congo in a cash deal, the media reported. 

Last year, the four banks had a total of  2,641 employees, while the customer base and loan book in the same period stood at 822,000 and Sh51.8 billion respectively.

Atlas Mara has reduced the value of those four banks after the Equity Group deal commenced, reflecting on its weak earnings. The valuation drop is attributed to it writing off intangible assets and premium paid while acquiring the four banks.

Atlas Mara told the media that, “Confirmatory due diligence has been substantially concluded and the group expects to announce the final terms of the transaction in due course.”

According to media reports, Equity Group will offer 6.2 percent of its shares worth Sh10.9 billion to Atlas Mara. Currently, Atlas Mara has offices setup in the British Virgin Islands. 

Last year, Atlas Mara appointed former Equity Bank chief of finance and innovation John Staley as CEO. 

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