Nigeria’s Access Bank acquires Kenya’s Sidian Bank for $36.7m

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Published: 2022-06-09
Access Bank is going to purchase its second bank in Kenya.

You can visit a bank branch in Lagos, which is located in Nigeria. Wikipedia was the source for this image.

According to recent reports, Access Bank is planning to purchase Kenyan Sidian Bank by paying $36.7 million to buy out Centum Investment's whole stake in the financial institution (Ksh 4.3 billion). Should the transaction be finalized, the Nigerian financial institution will have made its second acquisition in the Kenyan market.

According to The Standard, the transaction will result in Access Bank taking ownership of the 83.4% of shares that are presently held by Centum and its subsidiary Bakki Holdco Ltd.

The Chief Executive Officer of Access Bank, Roosevelt Ogbonna, stated that this transaction will assist Access in continuing to grow its footprint in Kenya, a country that the bank sees as critical to its strategy of diversification.

We will be in a strong position to offer regional trade finance and other cross-border banking services as a result of this deal and the subsequent merger with Access Bank Kenya, he said.

Since Ogbonna took over as CEO a month ago, succeeding Hebert Wigwe, this acquisition will be considered a significant milestone in the company's history.

In February of 2020, Access Bank paid $12.8 million (Ksh1.56 billion) to acquire 99.98 percent of Kenyan Transnational Bank. Since then, the company has rebranded the institution as Access Bank Kenya. It was claimed that Access Bank Kenya had already signed a formal agreement with Centum.

The transaction, which will reportedly add to the number of takeover agreements in Kenya's banking sector, is believed to be still subject to regulatory clearances in both Nigeria and Kenya.

Sidian has shown a strong interest in both small and medium businesses as well as trade finance, and as a result, the company's balance sheet has increased from $162.2 million (Ksh 19 billion) in 2012 to $256.2 million (Ksh 30 billion) by the end of March 2022. Sidian will be merged into Access Bank Kenya as part of Access Bank's aspirations to create a more powerful financial institution. Access Bank is confident that this process will propel Access Bank Kenya to the position of Tier 2 bank in Kenya.

James Mworia, CEO of Centum, anticipates that the transaction would bring in the necessary monetary worth, which he will then utilize to invest in several other vital industries in East Africa.

"This deal represents a strong commitment by Access Bank to the future of the Kenyan economy and ranks as one of the largest private equity transactions in East Africa," said Mworia. "This transaction stands as one of the largest private equity transactions in East Africa." "It advances Centum's aim to be Africa's foremost investment channel, and it strengthens our track record of attracting foreign investors into Kenya and the region to engage in remarkable firms," said the CEO of Centum. "It is our goal to be Africa's leading investment channel."