- Access Bank to acquire the South African bank for $26.72 million in the second quarter of this year
- Grobank has a financial problem, so this investment is expected to strengthen its balance sheet
- The acquisition of Grobank is one of many bank deals that the Nigerian lender is involved, as it eyes Southern Africa
Access Bank has received approval to acquire South African lender, Grobank Limited. The regulatory support will see the Nigerian bank purchase one of several financial institutions it plans to take over for the acquisition of new clients.
The Herbert Wigwe-led bank plans to wrap up the deal with Grobank by the second quarter of this year, which falls between April to June. The cost of the acquisition is valued at $26.72 million by GCR Ratings.
South African and Nigerian regulatory authorities have approved the deal which is expected to favour Grobank, as the South African lender has been struggling financially and in need of capital infusion.
In 2018, according to the GCR report, Grobank had a market capitalisation of USD15.1 billion, but fast forward to three years later, the company is being sold for 400 million South African rands. This will earn Access Bank a 49% majority stake.
Access Bank will take up the liabilities of Grobank after the completion of the deal. Commenting on the advantage of the acquisition, Wigwe said the Nigerian lender's presence in South Africa will enhance value for shareholders:
"Today's announcement represents significant progress in delivering on our strategic intent of becoming Africa's Gateway to the World in pursuit of our vision to be the World's Most Respected African Bank.
"Our presence in South Africa will no doubt accelerate the attainment of our goal of delivering our More than Banking promise to 100 million unique customers across the continent.
"It will also build on our existing foundation and deliver enhanced value to our shareholders, employees and other stakeholders."
Aside from Grobank, Access Bank has made some acquisitions in Kenya, Zambia and also eyeing Mozambique in order to increase its presence in the southern region of Africa.
The Nigerian credit firm is in talks with African Banking Corporation through Access Bank Mozambique. The lender is owned by ABC Holdings, which is under the umbrella of Atlas Mara.
Access Bank has, however, purchased Cavmont Bank Limited in Zambia and Transnational Bank in Kenya.
Dangote is the largest shareholder of his company through direct and indirect Holdings. The fund will be paid to him through the company's dividend.
Fakoyejo Olalekan is a Business and Financial Journalist with over three years of experience in covering finance and business activities within Nigeria and offshore. Prior to joining Legit.ng, he worked at Nairametrics where he wrote financial and investment analysis articles. Olalekan is a resourceful and result-driven journalist with a track record for conducting extensive research and interviews to produce articles that provide different perspectives to market activities.
Source: Legit Nigeria