KCB Group has entered into a definitive agreement with the shareholders of TMB to acquire a majority stake in the Democratic Republic of the Congo (DRC)-based lender.
The transaction is expected to close by the end of the third quarter of 2022, subject to regulatory, shareholders and other approvals. This will see KCB acquire 85 per cent of the shares in TMB while the existing shareholders will continue to hold the balance for a period of not less than two years after which KCB will acquire their shares.
KCB will pay a cash consideration for the shares determined based on the net asset value of TMB at the completion of the proposed transaction and using a price-to-book multiple of 1.49, according to a company statement.
TMB, a public company limited by shares is one of DRC’s largest banks with $1.5bn in total assets and has a strong offering in retail, SME, corporate and digital banking channels, the company says on its website. It has over 110 branches and numerous agency banking outlets spread across DRC.
Trade volumes between Uganda and DR Congo have increased in the recent past to a point where Uganda decided to build roads there.
KCB Group Chairman Andrew Wambari Kairu said the acquisition is part of their ongoing strategy to tap into opportunities for new growth while investing in and maximizing returns from the Group’s existing businesses.
“It gives us strong headroom to accelerate our growth ambitions to deliver better value for our shareholders and to bolster the push for deeper financial inclusion and social and economic transformation in Africa and beyond. We are excited that we can now play a role in catalyzing DRC’s and indeed East Africa’s economic expansion agenda,” Kairu said.
TMB chairman Robert Levy said: “We are very excited about the opportunities KCB offers in this transaction and we are proud to bring our unique DRC insights and experience to the KCB Group. We believe that by combining our local knowledge and standing with the size and expertise of KCB Group, we should be able to increase market share and shareholder value through unlocking our synergies and business opportunities.”