A plan by Access Bank Plc, Nigeria’s biggest lender by assets, to acquire a controlling stake in a Kenyan bank has collapsed after the companies failed to complete the transaction before a deadline.
(Bloomberg) — A plan by Access Bank Plc, Nigeria’s biggest lender by assets, to acquire a controlling stake in a Kenyan bank has collapsed after the companies failed to complete the transaction before a deadline.
Access Bank in June agreed to acquire 83.4% of Sidian Bank Ltd. from Centum Investment Co. for 4.3 billion shillings ($34.7 million). Centum’s shares fell 2.4% at 12:27 p.m. in Nairobi, the most since Dec. 19.
The date “has passed without all the conditions being fulfilled” despite the support of the Central Bank of Kenya, Centum said in a statement. “Centum was not able to reach acceptable terms with Access Bank for extension of the share purchase agreement and therefore opted not to pursue extension.”
The failure of the deal may delay Access Bank’s plan to double the share of assets outside its home market by 2027. The lender has been facing competition from startups and financial technology firms in its home market. Meanwhile, Kenya has a more mature lending market, and its economy is predicted to expand at a faster pace than Nigeria. In 2019, Access Bank acquired 94% of Kenyan lender Transnational Bank Ltd.
The parties were unable to reach an agreement on some conditions “needed to prudently complete the transaction,” Access Bank said in separate filing. “The bank remains, however, committed to growing its franchise in a safe and sound manner in Kenya and the broader East Africa community and will continue to explore a variety of organic and inorganic opportunities to grow.”
The Nigerian lender said last year it’s looking to boost the share of assets outside its home market by 2027 to about 35% from 15%. Its assets rose 15.4% to 13.5 trillion naira ($29.3 billion) in September from 11.7 trillion naira in 2021.
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