Equity Group Holdings (EQH) has completed the acquisition of Rwanda’s Compagnie Générale de Banque, better known as Cogebanque. The banking conglomerate announced that EGH had fulfilled the conditions set for the acquisition of Cogebanque, one of the top 5 banks in Rwanda.
Equity Managing Director and CEO, Dr James Mwangi, said the transaction was completed on 30th November 2023. Equity Group now owns 198,250 shares, representing 99.1250%, of the issued share capital of Cogebanque, making it a subsidiary of Equity Bank.
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“EGH is pleased to inform its shareholders and the public that the conditions precedent to the Cogebanque Acquisition including the receipt of all requisite corporate and regulatory approvals have been fulfilled and/or waived (as applicable),”he said.
He said EGH will commence the process of amalgamating the business of Cogebanque with that of Equity Rwanda after receiving final regulatory approval for the merger.
On 14th June 2023, EGH published a notice of its entry into a binding term sheet with the Government of Rwanda, the Rwanda Social Security Board, Sanlam Vie Plc and Ms. Judith Mugirasoni (collectively the Sellers) for the purchase of 91.93% of the issued shares in the capital of Cogebanque (the Cogebanque Acquisition) with a view to eventually amalgamating the business of Cogebanque with that of EGH’s existing banking subsidiary in Rwanda, Equity Bank Rwanda Plc (Equity Rwanda).
The announcement specified that completion of the Cogebanque Acquisition was subject to conditions customary to such transactions including completion of confirmatory due diligence, signature of definitive agreements, receipt of all regulatory approvals from, amongst others, the Central Bank of Kenya, the National Bank of Rwanda and, the COMESA Competition Commission and receipt of all applicable board and shareholder approvals.
Subsequently on 28th July 2023, EGH entered into a share purchase agreement (the Agreement) with the Sellers for the acquisition of 183,854 shares at a price of Rwanda Francs two hundred and ninety-seven thousand four hundred and six (RWF 297,406) per share.
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EGH simultaneously made an offer to the remaining shareholders of Cogebanque to acquire all their shares at the same price per share and on the same terms as set out in the Agreement with the intent that EGH would become the holder of up to 100% of the issued shares of Cogebanque.
The acquisition of Cogebanque will enable EGH to consolidate its position in Rwanda and is an important step towards the attainment of its vision of being Sub-Saharan Africa’s premier financial institution through delivering innovative products and services to customers, including, in particular, the effective use of technology.
EGH through the combined businesses of Equity Rwanda and Cogebanque, aims to provide even better access to competitive, tailored financial services to improve lives and livelihoods of the people of Rwanda, expand opportunities for wealth creation while also delivering significant value to its stakeholders.
Delayed approvals
The acquisition was projected to end in September this year but faced delays in obtaining the necessary approvals. At the end of 2022, Cogebank was the fifth largest bank in Rwanda by reported book value of total assets and shareholders’ equity. It serves customers in the corporate, small and medium sized enterprise and retail customer segment.
Rwanda’s Minister of Finance and Economic Planning Dr Uzziel Ndagijimana said, “The consolidation of Equity Bank Rwanda Plc and COGEBANQUE will create a stronger and more resilient banking institution better equipped to serve the needs of the people of Rwanda and will contribute to Rwanda’s economic growth and development. Additionally, this partnership demonstrates investors’ confidence in Rwanda’s economic potential and presents new opportunities for the financial sector to thrive.”
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According to its recently released results as at 30th September 2023, Equity Group Holdings reported deposits growth of 20% to Kshs1,208.6 billion up from Ksh1,007.3 billion with subsidiaries contributing a 49% growth and Equity Bank Rwanda growing by 39%.
Loans grew by 26% to Ksh845.9 billion up from Ksh673.9 billion with subsidiaries contributing a 46% growth, and Equity Bank Rwanda growing by 20%. Total assets grew by 24% to Ksh1,691.2 billion up from Ksh1,363.7 billion again with subsidiaries contributing 47% and Equity Bank Rwanda growing by 40%.
