top of page

DealMakers AFRICA 2019 Annual

side strap right.jpg

Deal of the Year (East Africa)


Merger of NIC Group and Commercial Bank of Africa

The announced merger of Kenya’s NIC Group with the country’s biggest privately-owned bank, Commercial Bank of Africa (CBA), early in 2019, created the third largest banking group in East Africa by assets, and the bank with the largest customer base in Africa – the largest merger between banks in the history of Kenya. 

Prior to the merger, NIC was a leading bank in asset financing with a strong base of mid-sized corporate clients, while CBA has a strong retail client base, including digital-only customers on its M-Shwari mobile platform.

In a joint statement to the market, the companies emphasised that the merger of the two lenders, associated with the Kenyatta and Ndegwa families, would “bring together the ‘best in class’ retail and corporate banks with strong potential for growth in all aspects of banking and wealth management. A combined entity would create a complementary base of over 38 million customers, a strong digital proposition and a robust corporate and asset finance offering”.

The merged bank, known as NCBA Group plc, has a combined asset base of US$4,11 billion in Kenya, a shareholder’s equity of $6,5 million, a combined market share of 9.9% and a customer base of over 40 million people in East Africa.

NCBA Group officially began operating as one on October 1, after the Central Bank of Kenya gave the green light on September 27. On October 22, NCBA listed 793.8 million new shares on the Nairobi bourse. The NIC Group initially had 703.9 million ordinary shares of Sh5 each, the additional shares will bring the sum total of issued shares to 1.49 billion at a par value of Sh7.45 billion.

While integration costs in the first few years will place pressure on margins, cost synergies resulting from branch rationalisations (in the form of overlapping areas in branch networks, technology, management and support functions), have the potential to support profitability. According to market analysts, the merged entity will be able to inject capital into strategic growth and digital expansion more efficiently, due to a strong capital base.

The timelines for completion of the merger were tight; the announcement of a potential deal was made in December 2018, and the operations of the joint entity were expected to start by Q3 2019. The transaction was cross-border, straddling Côte d’Ivoire, and four East African countries: Uganda, Rwanda, Tanzania and Kenya. The merger was complex and involved seeking multiple approvals from various regulators, including the Central Bank of Kenya, the Capital Markets Authority, and the Competition Authority of Kenya, the Fair Competition Commission of Tanzania, the Bank of Tanzania, the Bank of Uganda and the National Bank of Rwanda. Each of the merging entities also had subsidiaries that were merged in the process, resulting in a merger that included twenty other entities. The share exchange and business amalgamations deal saw shareholders of CBA end up with 53% of the enlarged NIC group.

The transaction, the first major deal since the regulator called for consolidation in the industry in 2015, has resulted in a stronger bank, creating value for its shareholders and offering customers a greater variety of products and services as a result of combined synergies. The bank is equally more accessible to customers, as a consequence of a widened branch network resulting from the merger. 

Financial Advisers:
NIC Capital, CBA Capital, Faida Investment Bank
Legal Advisers: IKM Advocates, Bowmans
Accountants: PwC; Ernst & Young (Kenya)
Consultants: Viva Africa Consulting



Pick of the Best (in no particular order)


Coca-Cola Sabco (East Africa) of stake in Almasi Beverages and Nairobi Bottlers

The transaction involved the acquisition of a 53.95% stake in unlisted public company Almasi Beverages, and the remaining stake of 27.6% in Nairobi Bottlers from Centum Investments plc. – a public East African investment company – by Coca-Cola Beverages Africa’s (CCBA) subsidiary, Coca-Cola Sabco (East Africa) (CCSEA). The deal was valued at Sh19,4 billion (US$192 million).  

Financial adviser, Stanbic, says that the deal was a strategic transaction for CCSEA to consolidate bottler operations in Kenya, and so strengthen Coca-Cola’s market position via improved nationwide execution, greater scale for product expansion and regional customisation, reduced downside risk and higher efficiencies.

CCSEA is the eighth-largest Coca-Cola bottling partner worldwide and the biggest on the African continent, operating in 12 countries across Africa. Almasi has three subsidiaries in Kenya – Almasi Bottlers, Kisii Bottlers and Rift Valley Bottlers which prepare, package, distribute and sell Coca-Cola branded non-alcoholic ready-to-drink beverages.

The transactions raised public interest concerns as to the extent to which the merger would impact employment opportunities, impact on competitiveness and the ability of national industries to compete in international markets. The deal was approved by the Competition Authority of Kenya on the following conditions: that 1,749 employees of a total 1,760 permanent employees be retained for a period of three years; that not less than 20% of total storage space leased to small outlets be reserved for competitors’ brands; and that within nine months of the completion of the transaction, the agreements between the merged entity and its distributors be amended to allow for the distribution of other non-alcoholic ready-to-drink beverages. 

The transaction required complex structuring considerations to meet the divergent needs of the buyer and seller. Ultimately, says Stanbic, the transaction was structured into a phase 1 acquisition of stakes held by Centum Investments, to be followed by phase 2 transactions to restructure and amalgamate operations of the enlarged group. 

Financial Advisers: Standard Bank, Stanbic Bank Kenya
Legal Advisers: Bowmans, KN Law


Equity Group plc acquisition of stake in

Banque Commerciale du Congo

Equity Group, a Nairobi Securities Exchange-listed financial services holding company headquartered in Nairobi, Kenya – with subsidiaries in Kenya, Uganda, Tanzania, South Sudan, Rwanda, and the Democratic Republic of the Congo (DRC) – announced that it had entered into a share purchase agreement for the acquisition of a 66.53% stake in Banque Commercial Du Congo (BCDC) for Sh10,7 billion (US$105 million).


The transaction is in line with its continued drive to enhance its Pan–African reach and financial inclusion agenda, and further cements its presence in the DRC following the acquisition in 2015 of Pro Credit Bank, renamed Equity Bank Congo (EBC). The stake, acquired from George Arthur Forrest, is payable in cash for the 625,354 shares to be purchased inclusive of dividends after January 1, 2019 – a cum dividend price per share of $167.90.

In addition to the investment in BCDC, Equity Group proposes to increase its shareholding in EBC by a further 7.6% in a deal with Kreditanstalt Für Wiederaufbau (KfW) following the exercise of a put option granted to KfW under a shareholders agreement. Equity Group will pay Sh 915,2 million ($9,06 million) for the stake of 192,000 shares.

BCDC, which is the second largest bank in the DRC, will eventually be amalgamated with that of Equity Group’s existing banking subsidiary EBC.

The Group aims to provide access to competitive, tailored financial services to transform lives and expand opportunities for wealth creation, while at the same time delivering significant value to shareholders. 


Financial Advisers: Stanbic Bank Kenya
Legal Advisers: Anjarwalla & Khanna

side strap left.jpg


DealMakers Africa’s awards are based essentially on objective evidence - the value of deals or transactions, and the number of them. In limited instances judgment has to be applied on the categorisation and value ascribed to a particular deal or transaction. In only two of the awards is selection subjective and we approach these with considerable circumspection; they are for the Deal of the Year and the Private Equity Deal of the Year.

The first stage with both Deal of the Year and Private Equity Deal of the Year is that the DealMakers Africa editorial team, with nominations from the advisory firms, produce a short list of those it believes best qualify for consideration with input from the Independent Panel. The papers and press comment on each deal is then bundled and delivered to the members of the panel.

The Panel ranked the deals on the following criteria:

Deal of the Year:

Transformational transaction – does the deal or transaction transform the business or even the industry in which it operates? What is the extent of potential transformation as a result?

Execution complexity – does the overall deal or transaction involve multiple steps/a number of smaller inter related deals? Are there numerous conditions precedent that need to be fulfilled? Does it involve many and/or complex regulatory approvals?  Are there related debt/equity raising processes and how difficult are they to implement? Was there significant time pressure to conclude the deal/transaction? Did the deal/transaction exhibit innovative structuring?

Deal size – not an over-riding determinant but a significant factor.

Potential value creation – to what extent could shareholders and other stakeholders transaction over time?

Private Equity Deal of the Year:

Asset with good private equity characteristics – cashflow generative business and able to service an appropriate level of debt? A business model that is resilient to competitor action and downturns in the economic cycle? Strong management team that is well aligned with shareholders and capable of managing a private equity balance sheet? Predictable capex requirements that can be appropriately funded?

Deal size – is a factor to filter deals but plays a limited role for acquisitions. It does carry more weight for disposals.

Potential/ actual value creation – was the asset acquired at an attractive multiple? If the deal is a disposal was it sold at an attractive price? What is the estimated times money back and/or internal rate of return?


There is limited information available in the public domain on the private equity deals, and even somewhat educated guess work doesn't provide all answers in all instances.

bottom of page