Financial group Atlas Mara Limited (LSE:ATMA) has recently reached an agreement to acquire of Finance Bank of Zambia Plc (FBZ) by Q1 2016.
Zambia is expected to grow this year 5.8% up from 4.3% projected by the International Monetary Fund (IMF), reason why Atlas Mara decided to expand its presence in Zambia with FBZ to tap the country’s long-term prospects and develop its financial services, explained Atlas Mara CEO John F. Vitalo.
The group currently operates in Zambia under the name African Banking Corporation Zambia Limited (BancABC Zambia) which resulted from the acquisition of African Banking Corporation over a decade ago and that currently manages 22 branches in Zambia’s ten provinces, representing approximately 33% of the total BancABC branches in the five countries where it has presence.
Both banks will be merge under one name that has not been disclosed yet, to support Zambia’s financial inclusion with an enhanced scope in the country and a wider range of products available for the population, explained Mr. Vitalo.
The new bank is expected to have a total of 85 branches throughout Zambia’s 10 provinces, making it the largest in the country ahead of Barclays Zambia’s with a total of 70 branches.
The takeover has been valued at USD 60 million in cash and up to 2.6 million of Atlas Mara’s shares currently worth USD 15.6 million approximately.
However, the final amount is expected to be agreed by the end of Q1-2016 and could reach the USD 61 million in cash and up to 5.7 million shares currently worth USD 34.2 million, after conditions as ZMW/USD exchange rate and forecasts of cash flows are reviewed.
Precedent and requisite regulatory approvals are also needed to be issued by Zambian authorities to complete the agreement.
FBZ is currently owned by private investors with Credit Suisse Group AG (SWX:CSGN) holding 15% of the bank’s share capital.