Nigeria’s Zenith Bank Finalizes Acquisition of Kenyan Bank

Nigeria-based financial institution Zenith Bank PLC has confirmed the completion of its acquisition of Paramount Bank Kenya Limited.

In a statement on Tuesday, April 7, the lender announced that the transaction has been concluded after securing all the necessary regulatory approvals from authorities in both Kenya and Nigeria.

"Zenith Bank PLC is pleased to announce the completion of its acquisition of the entire issued share capital of Paramount Bank Kenya Limited following the receipt of all requisite regulatory approvals in Kenya and Nigeria," the statement read.

Zenith Bank said the acquisition represents a strategic milestone for the Nigerian banking giant as it seeks to expand its influence across East Africa.

"This acquisition marks a significant step towards our long-term strategic growth agenda and a strong inroad into the East African markets," the statement added.

Zenith Bank noted that the move aligns with its ambition to solidify its standing as a top-tier financial institution in Sub-Saharan Africa.

"It further reinforces the Bank's position as a leading financial institution in Sub-Saharan Africa and affirms the Bank's mantra of following our customers' businesses," the statement concluded.

This comes weeks after Nedbank formally tabled a multibillion-shilling bid to acquire a controlling stake in NCBA Group Plc.

The proposed transaction, which values the targeted stake at about Ksh110 billion based on the offer terms, would see Nedbank acquire effective control of NCBA while retaining a substantial public float on the Nairobi Securities Exchange (NSE).

In a public notice on Monday, February 9, NCBA informed shareholders and the investing public that Nedbank had served it with an Offeror’s Statement outlining the structure, conditions and strategic rationale of the proposed deal.

The offer is structured as a partial pro rata acquisition rather than a full takeover, subject to regulatory approvals in Kenya and other jurisdictions.

NCBA said Nedbank intends to acquire approximately two-thirds of the bank through a share-based and cash consideration extended to existing shareholders.

NCBA explained that the offer would allow shareholders to tender up to 66 per cent of their holdings, with limited scope to tender excess shares depending on final allocations.

"The Offer will be implemented on a partial pro rata basis, such that NCBA Shareholder will be entitled to tender up to 66 per cent of the shareholding with the opportunity to tender excess shares subject to satisfying compliance with the terms of the Offer document," the notice added.

Under the proposal, shareholders who accept the offer will receive a mix of Nedbank shares and cash, with equity forming the bulk of the consideration.

"The consideration payable under the Offer for every 100 NCBA Shares tendered and accepted (adjusted to a pro rata basis as required) will comprise: (a) 80% of the consideration, settled through the issue of 4,099,494 ordinary shares in Nedbank; and (b) 20% of the consideration, settled in cash in the amount of KES 2,000,000 (Cash Portion)," the notice continued.

NCBA further disclosed the pricing basis for the Nedbank shares to be issued, anchoring the valuation to South African market prices and prevailing exchange rates.

"The Nedbank ordinary shares (Nedbank Shares) to be issued pursuant to the Offer will be issued at a price of ZAR 250.00 per Nedbank Share, determined by applying the KES/ZAR spot exchange rate of 7.7143 as at the close of business in South Africa on 18 December 2023," the notice further read.

The announcement noted that not all shareholders will receive Nedbank shares, with certain categories instead receiving cash-only consideration.