Equity’s Rwanda bank buy deal hits $47m

Saturday December 02 2023
James Mwangi

Equity Group Managing Director and CEO Dr James Mwangi during an investor briefing in Nairobi, Kenya on November 20, 2023. PHOTO | NMG


The cost of acquisition of Rwandese lender Compagnie Générale De Banque (Cogebanque) by Equity Group has increased to Ksh7.2 billion ($47 million) after the Kenyan banking multinational moved to purchase an additional 7.2 per cent stake from minority shareholders ahead of the close of the deal.

Equity announced in June that it would purchase a 91.93 per cent stake or 183,854 shares in Cogebanque at a cost of Rwf297,406 (Ksh36,704) per share, valuing the deal at Ksh6.74 billion ($44 million).

In a statement issued on Friday announcing the close of the deal, the bank said it had managed to raise its total stake to 99.13 per cent, indicating that it had successfully convinced minority shareholders not involved in the initial agreement to sell it 14,396 shares worth Ksh528.4 million ($3.5 million). 

Read: Kenya banks cashing on regional units to prop bottom-line

Purchase agreement

The initial agreement had seen the lender lock up stakes held by the Government of Rwanda (41.67 percent), Rwanda Social Security Board (30.6 percent), Ms Judith Mugirasoni (12.68 percent) and Sanlam Vie Plc (6.98 percent).


“On July 28, 2023, Equity Group entered into a share purchase agreement with the sellers for the acquisition of 183,854 shares at a price of Rwf297,406 per share (and) 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,” said the lender yesterday.

“The acquisition of Cogebanque was completed on November 30, 2023, and Equity Group now owns 198,250 shares representing 99.125 per cent of the issued share capital of Cogebanque, making Cogebanque its subsidiary.”

New subsidiary

Equity had picked on the price for the stake with the guidance of AstuteLogic Advisory Limited — a transaction advisor – based on the potential cash flows from the new subsidiary and the valuation of a KCB deal in the same market. KCB paid Ksh5.3 billion for an initial 62.06 percent stake in Banque Populaire du Rwanda (BPR).

Read: Rwanda leads region in minting profits for Nairobi banks

It also arrived at the price after striking a deal with Rwanda to buy Cogebanque’s head office at Rwf11.49 billion (Ksh1.4 billion) within one year of completion of the transaction.

Cogebanque, which boasts 28 branches and 600 agents in Rwanda, closed last year and ranked fifth among the licensed banks operating in the country when measured by reported aggregate total assets and total shareholder funds.