The acquisition follows an agreement with the majority shareholder—George Arthur Forrest and family to acquire all the 625,354 shares (66.53 per cent) owned by the Belgian at a cost of $105 million.
The government of the Democratic Republic of Congo owns 25.53 per cent while other minority shareholders own the remaining 7.94 per cent shares.
The price of the transaction includes dividends declared after January 1, 2019, in respect of the financial year ending December 31, 2019, transpiring to dividend price per share of $ 167.9 per share.
In a statement, Equity Bank Chief Executive James Mwangi said the acquisition provides more motivation for it to push ahead with its 2024 dream of converting into a pan African bank.
“This is an opportunity for the Group to take further steps towards the delivery of its vision of building sub-Saharan Africa’s premier financial institution through delivering innovative products and services to customers, including, in particular, the effective use of technology,” said Dr Mwangi.
The transaction is still subject to regulatory approvals from the Central Bank of Kenya (CBK), Banque Centrale du Congo, the COMESA Competition Commission (CCC) and the board approvals of Banque commercial du Congo ( BCDC) and Equity Group Holdings.
The BCDC is the second-largest lender in DRC with assets estimated to be worth the region of $700 million.
Equity already has operations in DRC through Pro Credit Bank, with a 86 per cent stake.
Between 2015 and 2017, Pro Credit Bank was the seventh-largest bank in the DRC by assets exceeding $200 million and a customer base of over 170,000.
Equity Bank has also proposed to increase its shareholding in Equity Bank Congo S.A (EBC) by acquiring an additional 7.6 per cent of the shares currently held by the German state-owned development bank, KFW.
If the acquisition succeeds, it will effectively push the lender’s shareholding in EBC S.A to about 94 per cent, with the remaining six per cent left to the International Finance Corporation (IFC).
Currently, Equity bank has more than 14 million customers, 289 branches across the region with operations in Kenya, Uganda, Rwanda, Tanzania, South Sudan and the DRC.