DRC – KCB Group, the Kenyan financial services holding company, is set to acquire a majority stake in DRC-based TMB Bank, marking its entry into the country with a population of over 93 million people.
The transaction is expected to close by the end of the third quarter of 2022, subject to regulatory, shareholders, and other approvals.
KCB will acquire 85 per cent of the shares in TMB while the existing shareholders will continue to hold the balance for a period of not less than 2 years after which, KCB will acquire their shares.
The lender will pay cash consideration for the shares determined based on the net asset value of TMB at the completion of the proposed transaction and using a price to book multiple of 1.49.
Once completed, this acquisition will complement KCB Group’s regional footprint with an asset base of KSh1.5 trillion (US$12.60bn) and is expected to strengthen the Group’s Retail and Corporate banking franchises.
“This is part of our ongoing strategy to tap into opportunities for new growth while investing in and maximizing returns from the Group’s existing businesses,” said Andrew Wambari Kairu, KCB Group Chairman.
“It gives us strong headroom to accelerate our growth ambitions to deliver better value for our shareholders and to bolster the push for deeper financial inclusion and social and economic transformation in Africa and beyond.”
Kairu added the group is excited that they can now play a role in catalyzing DRC’s and East Africa’s economic expansion agenda.
TMB, a public company limited by shares, is one of DRC’s largest banks with KSh178.4 billion (US$1.50bn) in total assets
It has over 110 branches and numerous agency banking outlets spread across the Democratic Republic of Congo (DRC).
“We believe that by combining our local knowledge and standing with the size and expertise of KCB Group, we should be able to increase market share and shareholder value through unlocking our synergies and business opportunities,” said Robert Levy, TMB Chairman.
With the acquisition, TMB customers will benefit from best-in-class digital capabilities, transactional banking solutions, trade finance expertise, and access to regional business opportunities offered by KCB Group.
The deal will see KCB in head-to-head with Equity, which entered the DRC in 2015 through a buyout and increased market share in 2020 after acquiring another lender– Banque Commerciale du Congo (BCDC).