TheCable

Access Bank Plc has announced that its subsidiary, Access Bank Zambia (ABZ), has entered into a definitive agreement with Cavmont Capital Holdings Zambia (CCHZ) regarding a merger and acquisition of Cavmont Bank Limited.

This was disclosed in a statement signed by Sunday Ekwochi, Access Bank company secretary, on Thursday.

On July 8, Access Bank had announced that it was in exclusive discussions with CCHZ concerning the transaction.

“The proposed transaction, which remains subject to relevant shareholder and regulatory approvals, will position the enlarged ABZ as one of the top 10 banks in Zambia and create the momentum to advance its strategic objectives,” the statement read.

“Under the terms of the agreement, ABZ will acquire the entire issued ordinary share capital, assets and liabilities of Cavmont Bank while Capricorn Group Limited, the ultimate majority shareholder of CCHZ, will invest at least $16.5 million of preference shares into ABZ.

“Capricorn will hold preference shares in the enlarged ABZ for a period of five years after which the preference shares will be acquired by Access Bank.”

Commenting on the transaction, Herbert Wigwe, group managing director of Access Bank, said: “It will strengthen our presence in Zambia, while furthering our footprint for growth in the Common Market for Eastern and Southern Africa (COMESA) region, Africa’s largest free trade area.”

“Over the years, we have worked hard to build a sustainable international bank of African origin that can expand the potential of businesses, support economic prosperity, facilitate trade and investment and extend the power of banking to millions of people who do not yet have the financial tools to achieve their dreams. This proposed transaction aligns with the strategy,” Wigwe added.

On his part, Thinus Prinsloo, MD of Capricorn Group, said: “This transaction is an excellent strategic fit with Cavmont Bank’s presence in Zambia and will strengthen the capital base from which to achieve long-term sustainable growth.”

The statement added that the transaction is expected to be completed during the fourth quarter of 2020.