I&M buys 90pc stake in Ugandan lender

I&M Holdings has announced the acquisition of Uganda’s Orient Bank Limited.

In an announcement to shareholders yesterday, I&M board said an agreement had been reached to acquire a 90 per cent stake in the Ugandan lender on July 17, subject to regulatory approvals.

The deal, if successful, will see the lender grow its footprint across the region - having acquired Bank One jointly with the CIEL business group of Mauritius.

“Completion of the above transaction (the “proposed transaction”) is subject to several conditions, including receipt of all regulatory and corporate approvals, including those from the Central Bank of Kenya, the Bank of Uganda, the Capital Markets Authority and the shareholders of the company in a general meeting,” read the statement from the group.

The holding company said the proposed transaction may affect the value of the shares of the company.

“The shareholders of the company and the public are accordingly advised to exercise due caution when dealing in the shares of the company,” said the board in the statement concerning the acquisition of Orient Bank Uganda.

The deal also ends a tussle that the Kenyan lender had with a Nigerian bank.

Four years ago, I&M was involved in a tussle with Keystone Bank of Nigeria following Keystone’s divestment from Orient and subsequent sale of the majority stake to Irish private equity firm 8 Miles LLP.

I&M had reportedly targeted acquisition of 80 per cent shareholding in Orient Bank Uganda.

The Kenyan lender's forays into Uganda comes hot on the heels of Equity Bank's suspension of negotiations to acquire four banks in Rwanda, Tanzania, Zambia and Mozambique.

Shares swap

In 2019, Equity Group Holdings announced plans to acquire banking assets of Atlas Mara in four African countries in a transaction that was to be done through shares swap.

But the bank called off the negotiations last month after initially announcing the extension of discussions with Atlas Mara, following the expiry of the transaction period before the two parties could sign a detailed transaction agreement.

In a troubled economic ride, many financial institutions have resorted to mergers and acquisitions in a bid to survive.