Nigeria’s Access Bank says it will look for other buyout opportunities in Kenya and the rest of East Africa after its proposed acquisition of Sidian Bank collapsed after the parties failed to reach an agreement.
The multinational is keen to grow in Kenya having bought a 99.98 percent stake in Transnational Bank –a small institution— in July 2020 at a cost equivalent to Sh1.5 billion excluding a deferred consideration.
Large banks have more assets and clients, placing them in a better position to grow their earnings as costs take up a smaller portion of revenue.
“Consequently, we hereby notify the Nigerian Exchange Ltd and the investing public that Sidian acquisition will no longer be completed by the bank,” Access Bank said in a notice.
“The bank however remains committed to growing its franchise in a safe and sound manner in Kenya and the broader East African Community and will continue to explore a variety of organic and inorganic opportunities to grow its market share therein.”
It said although regulators were supportive in engagements around the Sidian Bank transaction, certain conditions needed to prudently complete the deal were not met.
Parties were unable to reach an agreement on the variation of these conditions in a manner to deliver the desired outcome for the parties, Access Bank added without giving details.
Sidian Bank’s majority shareholder Centum Investment Company Plc, separately disclosed that it terminated the proposed sale of its 83.4 percent stake in the bank after its request to be paid the entire Sh4.3 billion at once was rejected by the Nigeria-based lender.
The parties initiated talks in 2021, culminating in the signing of a share purchase agreement in June 2022.
Centum’s chief executive James Mworia recently told Business Daily that the company was to be paid Sh1.7 billion after two years from September 2022 when the transaction was originally expected to have been concluded.
Securing approvals from authorities took longer than anticipated and went beyond the long stop date of December 5, 2022 –the time when the parties could agree to extend the deadline on the same or revised terms.
Mr Mworia said Centum would have suffered a significant economic loss if it were to accept to be paid the balance of Sh1.7 billion at what would have been a more delayed date stretching into late 2024.