NIC Group PLC (“NIC”) and Commercial Bank of Africa Limited (“CBA”) wish to announce that their respective Boards of Directors have agreed to the merger of NIC and CBA.
The merger will be completed upon fulfillment of a certain set of conditions precedent, customary to transactions of this nature, including but not limited to, the parties obtaining applicable shareholder and regulatory approvals, and the parties entering into and completing various transactional agreements to complete the merger.
The proposed merger will create a bank with the financial strength, expertise, and regional reach to support Kenya’s and the regions’ economic growth aspirations. In particular, the merged entity will be in a strong position to play a key role in supporting Kenya’s economic ambitions, specifically facilitating implementation of the Big Four Agenda which focuses on food security, affordable housing, manufacturing, and universal healthcare.
The combined bank will be amongst the largest financial institutions in the East Africa region with a total asset base in excess of KES 444 Billion and Shareholders’ Equity of KES 65 Billion. It will be the second largest bank in Kenya by customer deposits and third largest by total assets and a true market leader in Corporate Banking, Asset Finance, and Digital Banking. The bank will operate a network of more than 100 branches across five regional economic centers including Nairobi, Kampala, Dar es Salaam, Kigali, and Abidjan. Serving over 40 million customers, the combined entity will be the largest bank in Africa by customer numbers.
The proposed merger will be executed through a share swap, and it is proposed that the 34 shareholders of CBA will exchange their shares in CBA for new shares in NIC, which will be the holding company of the merged businesses and remain a publicly listed company quoted on the Nairobi Securities Exchange. It is envisioned that the share exchange ratio will be based on a 47:53 relative valuation of NIC and CBA respectively. As such, it is expected that the CBA shareholders will in aggregate own 53% of the then issued shares in NIC, whilst existing NIC shareholders will own 47% of the then issued shares in NIC.
The merged entity will be a universal bank providing a full range of financial products and services to corporate, institutional, SME and consumer banking customers, who will benefit from strong relationship management and customer service excellence. This institution will be a clear market leader in Asset Finance and Corporate Banking. On the digital front the bank will remain a clear leader in innovation,through well established brands such as M-Shwari and Fuliza (in partnership with Safaricom in Kenya), M-Pawa (in partnership with Vodacom in Tanzania), MoKash (in partnership with MTN in Uganda and Rwanda) and MoMoKash (in partnership with MTN and Bridge Group in Côte d’Ivoire), and will play a key role in supporting the financial inclusion agenda in all these markets. The combined entity is firmly positioned to become, not just a significant player in the region, but the leading bank in Kenya. The combined larger group will provide new and greater opportunities for employee development, advancement, and growth.