KCB Group expects to finalise the acquisition of Democratic Republic of Congo lender Trust Merchant Bank (TMB) by the end of the year after receiving shareholder approval for the transaction.
The tier-one lender said the shareholders’ nod at an Extra Ordinary General Meeting (EGM) held in Nairobi on Wednesday will see it accelerate the acquisition, which it first revealed last month.
KCB, which already has operations in Rwanda, Burundi, Tanzania, Uganda, and South Sudan, wants to acquire an 85 percent stake in TMB and plans to buy the remaining shares within two years.
The deal will be priced at 1.49 times the book value or net assets of the DRC lender, which as of the end of 2021 stood at Sh14.15 billion. This would value the takeover at Sh17.9 billion at this multiple.
“The approval of the transaction demonstrates the confidence our shareholders have in the financial and strategic benefits of the transaction and the value it provides our regional clients and communities,” said KCB Group CEO Paul Russo.
“The transaction is expected to close before the end of the year, subject to regulatory approvals and other customary closing conditions.”
The deal will see KCB go to head-to-head with Equity, which entered the DRC in 2015 through a buyout of ProCredit Bank and increased market share in 2020 after acquiring another lender-- Banque Commerciale du Congo (BCDC).
TMB is one of DRC’s largest banks, with Sh181.5 billion ($1.5 billion) in total assets. The lender, which is headquartered in the DRC’s second largest city Lubumbashi, began operations in 2004.
As of June last year, the lender commanded an 11 percent market share in the DRC, having established 109 branches in the country and a representative office in Belgium.