Nigerian top lender Access Bank is set to buy out the entire stake of Centum Investment in Sidian Bank for Sh4.3 billion, its second acquisition in the Kenyan market.
The deal will see Access Bank take over the 83.4 per cent that has been in the hands of Centum and its subsidiary Bakki Holdico Ltd in what will increase the size of Nigerian banks in Kenya.
Centum Chief Executive James Mworia said the Sh4.3 billion is a 59 per cent premium to the book value, adding that the proceeds will be used to invest in other strategic sectors in East Africa.
“This transaction stands as one of the largest private equity transactions in East Africa and reflects a strong commitment by Access Bank to the future of the Kenyan economy,” said Mr Mworia.
“It advances Centum’s vision to be Africa’s foremost investment channel and bolsters our track record of attracting foreign investors into Kenya and the region to invest in extraordinary enterprises.”
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Access, which in February 2020 acquired a 99.98 per cent stake in Transnational Bank for Sh1.56 billion and rebranded it into Access Bank Kenya, has already signed a binding agreement with Centum.
Completion of the transaction is subject to regulatory approvals in Nigeria and Kenya and will add to the acquisition deals in Kenya’s banking sector.
Other lenders that have been acquired in the last eight years include Fina Bank, K-Rep, Equatorial Commercial Bank, Giro Commercial Bank, Oriental Commercial Bank, Fidelity Bank, Habib Bank, Chase Bank, National Bank of Kenya, Mayfair Bank and Jamii Bora Bank.
The Nigerian lender plans to merge Sidian Bank with Access Bank Kenya to create a stronger banking institution and bring to an end the Sidian brand, which started off as K-Rep Bank.
Centum’s exit from Sidian adds to Almasi Beverages, Nairobi Bottlers and King Beverages that the listed investment firm has sold in the recent past.
The firm has, however, not matched these exit deals with new acquisitions, with Mr Mworia saying that Covid-19 disruptions made it difficult for dealmakers to value firms on the strength of future earnings.
Access Bank CEO Roosevelt Ogbonna said the transaction will help the Nigerian lender to strengthen its presence in Kenya — a market the bank regards as key to its diversification strategy.
“Through this transaction and the subsequent merger with Access Bank Kenya, we will be well placed to promote regional trade finance and other cross border banking services,” he said.
The deal will see Nigerian banks deepen their stake in Kenya with United Bank of Africa and Guarantee Trust Bank also in the market.
Other top shareholders in Sidian include K-Rep Group Ltd (11.42 per cent), KWA Multi-Purpose Co-op (3.26 per cent) and Kimanthi Mutua (0.48 per cent).
Merging Sidian with Access Kenya has the potential to make the resultant bank a strong Tier II lender, according to Mr Ogbonna. Sidian has been keen on small and medium enterprises and trade finance and grew its balance sheet from Sh19 billion in 2012 to Sh30 billion as at end of March 2022.
Centum exits at a time Sidian has seen a recovery in performance. The bank last year grew its net profit from Sh19 million to Sh486 million—a record for the lender.
