Equity Group, a leading Kenyan banking multinational, has strategically and successfully concluded the acquisition of Compagnie Générale De Banque (Cogebanque) in Rwanda. In a shrewd financial move, Equity Group increased the transaction’s cost to Sh.7.2 billion by acquiring an additional 7.2 per cent stake from minority shareholders, showcasing their business acumen and dedication to growth.

The Deal Initiation

In June, Equity Group initiated the acquisition by declaring its intention to acquire a substantial 91.93 percent stake, equivalent to 183,854 shares in Cogebanque. The agreed cost per share was Rwf297,406 (or Sh36,704), valuing the deal at approximately Sh6.74 billion. Key stakeholders included the Government of Rwanda, Rwandan Social Security Board (RSSB), Ms. Judith Mugirasoni – a notable figure in financial circles, and Sanlam Vie Plc – a respected insurer with a global presence deeply rooted in Africa’s economic landscape.

Successful Negotiations

Equity Group recently revealed an impressive 99.13% increase in its total stake, successfully convincing previously uninvolved minority shareholders to sell an additional 14,396 shares, resulting in a sum of Sh.528.4 million for the bank.

Acquisition Completion

On November 30, 2023, Equity Group solidified its ownership of 198,250 shares, representing 99.125% of Cogebanque’s issued share capital, officially designating Cogebanque as a subsidiary to Equity Group.

Strategic Pricing and Financial Guidance

In determining the stake’s price, Equity Group collaborated with AstuteLogic Advisory Limited as its transaction advisor. The pricing strategy considered potential cash flows from the new subsidiary and drew insights from a comparable deal, where KCB paid Sh.5.3 billion for a 62.06% ownership in Banque Populaire du Rwanda (BPR). Strengthening their position through strategic negotiations, Equity Group also independently secured Cogebanque’s head office directly with Rwanda at Rwf11.49 billion (Sh1 billion) within one year post-transaction completion.

Impact of Cogebanque

Cogebanque, with 28 branches and 600 agents in Rwanda, closed the previous year, holding the fifth position among licensed banks in reported aggregate total assets and total shareholder funds. This strategic acquisition positions Equity Group as a significant player in the Rwandan financial landscape, with potential benefits for both entities and the broader banking sector in the region.