Under the terms of the transaction, KCB will acquire 85% 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 have the right to acquire their shares.
Once completed, TMB will complement KCB Group's footprint with an asset base of KShs. 1.5 trillion (US$ 12.6 billion) and is expected to strengthen the Group's retail and corporate banking franchises.
KCB Group Plc shareholders have approved the proposed acquisition of the DRC-based lender Trust Merchant Bank SA (TMB) during an Extra Ordinary General Meeting held today in Nairobi.
In August 2022, KCB Group Plc entered into a definitive agreement with shareholders of TMB to acquire the Bank. Under the terms of the transaction, KCB will acquire 85% 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 have the right to acquire their shares.
The acquisition is part of KCB’s ongoing strategy to expand its regional participation, accelerate growth and maintain sustainable long-term regional success while investing in and maximizing the returns from its existing businesses. It will give KCB the opportunity to conduct business in the DRC market, the newest member of the East African Community.
Speaking during the meeting, KCB Group Chairman Wambari Kairu said: “The shareholders’ nod is a major milestone for us to accelerate the acquisition process which will allow us to scale up our balance sheet, and revenue streams and contribute positively to KCB’s growth and diversification objectives. In turn, KCB will be able to rapidly establish its presence within DRC by leveraging on TMB’s 18-year operational history and vast branch network,” Mr. Kairu said.
“In addition, the transaction will position KCB strongly with the resultant effect being enhancing its ability to compete with other financial service providers strongly and effectively in DRC and regionally. This will have long-term benefits for shareholders, customers, and employees and enable KCB to realize its long-term vision and mission,” he added.
TMB, a public company limited by shares, is one of DRC’s largest banks, with US$1.5 billion in total assets. TMB has a strong offering in Retail, SME, Corporate, and Digital banking channels. It has 109 branches and numerous agency banking outlets spread across DRC. With an insurance subsidiary called Affrissur SA, the transaction will provide a good platform for KCB to diversify its offerings in the region.
“The approval of the transaction demonstrates the confidence our shareholders have in the financial and strategic benefits of the transaction and the value it provides our regional clients and communities,” KCB Group CEO Paul Russo said. “Following the completion of the transaction, the combined organization will have immediate scale benefits to create extraordinary value with a shared customer-centric strategy and broader client capabilities in a rapidly growing market.”
The transaction is expected to close before the end of the year, subject to regulatory approvals and other customary closing conditions. This acquisition is aligned with the Group’s strategic focus of scaling its regional presence. Once completed, TMB will complement KCB Group’s footprint with an asset base of KShs. 1.5 trillion (US$ 12.6 billion) and is expected to strengthen the Group’s retail and corporate banking franchises.