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Equity acquires Cogebanque as the bank expands throughout East Africa

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Equity Bank’s ambitious plans to acquire local banks across east Africa that had been on hold since 2020, have resumed as the bank’s Rwanda branch acquires Cogebanque Plc, with the acquisition of 99.8 percent stake.

The bank aspired to acquire four banks in Rwanda, Zambia, Tanzania and Mozambique owned by Atlas Mara (ATMA). 

The acquisitions comes after, in April 2019, Equity Bank entered into an agreement with Atlas Mara, which is listed on the London Stock Exchange (LSE), to acquire 100 per cent shareholding in BancABC Zambia, Mozambique and Tanzania, including 99 percent of the shares of Banque Populaire du Rwanda Ltd.

According to the agreement, for the exchange, Equity would surrender an estimated 252.5 million new ordinary shares representing 6.27 percent of the bank to Atlas Mara valued at Rwf110 billion (approximately $107 million).

Equity, which currently has operations in six countries—Kenya, Uganda, Tanzania, Rwanda, South Sudan and the Democratic Republic of Congo(DRC) and a commercial office in Ethiopia—had hoped to establish a presence in 15 to 18 countries by 2024 with a customer base of more than 100 million clients as part of its ambitious Pan-African expansion drive.

Equity announced in June that it would purchase a 91.93 per cent stake or 183,854 shares in Cogebanque at a cost of Rwf297,406 per share, valuing the deal at Rwf 45 billion ($44 million).

In a statement issued on Friday announcing the close of the deal, the bank said it had managed to raise its total stake to 99.13 per cent, indicating that it had successfully convinced minority shareholders not involved in the initial agreement to sell it 14,396 shares worth Rwf4 billion ($3.5 million).

The initial agreement had seen the lender lock up stakes held by the Government of Rwanda (41.67 percent), Rwanda Social Security Board (30.6 percent), Ms Judith Mugirasoni (12.68 percent) and Sanlam Vie Plc (6.98 percent).

The Atlas Mara transaction, which was expected to be completed by December 2019, would have raised Equity’s presence to nine countries, in addition to Kenya, Rwanda, DRC, Uganda, South Sudan and Ethiopia.

The merged entities now have total combined assets and deposits of market share of 18 percent and 19 percent, respectively, according to audited accounts of December 2022.

This will be further enhanced through the combination of Cogebanque’s existing network of 28 branches with that of Equity Rwanda to achieve countrywide distribution and coverage.

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