NIC Group of Kenya awaits approval from the Fair Competition Commission (FCC), for acquiring entire operation of Commercial Bank of Africa (Tanzania).
The two banks entered into taking over agreement in March and is now subject to FCC approval. If approved, the merger will pave the way for the two companies to create the third-biggest bank by assets in East Africa.
FCC has so far published a notice to call stakeholders’ opinion prior to issue a nod on the taking over. “The acquiring and target firms are licensed commercial banks that offer commercial bank products and services to their customers in Tanzania market,” FCC said in its public notice.
FCC said the merger agreement was concluded at the beginning of March and the proposed transaction will result CBA to become wholly subsidiary of NIC. “… Based on the merger agreement [between NIC and CBA] is to form a single entity,” FCC said.
The fair competition regulator said is currently investigating the intended acquisition and parties that have sufficient interest in the merger are called to submit information in the next 14 days from Tuesday.
NIC Tanzania has seven branches and CBA has six branches in the country. In Kenya, the two banks confirmed their merger plan.
CBA shareholders will be issued with shares amounting to a 53 per cent stake in the merged institutions, effectively making the deal a reverse takeover of NIC. NIC’s existing shareholders will hold 4 7-per cent eq uity in the combined operation.
The deal is currently valued at Ksh65bn (Tsh- 130bn), being the book value of the two institutions based on numbers published in the September q uarter.
NIC bank, apart from Tanzania, currently has regional operations in Uganda while CBA entered the Rwandan market through the acquisition of the Rwandese subsidiary of Uganda’s Crane Bank earlier this year. CBA is also planning to expand to other markets such as Mozambique, DRC and Ethiopia through an online presence.