Access Bank acquisitions trigger losses for shareholders

The Nigerian capital market reacted negatively to the report of Access Bank acquiring a commercial bank in Mozambique, crashing the Nigerian lender’s stock value in two days.

Recall that the bank just completed another acquisition outside the shores of Nigeria after sealing a takeover deal of African Banking Corporation, Mozambique.

This is the bank’s fifth acquisition in four years.

In 2018, the lender acquired Diamond Bank through a merger and acquisition deal, completed in 2019. In the fourth quarter of the same year, it acquired Transnational Bank (Kenya) Plc.

In August 2020, the bank also announced the acquisition of Cavmont Bank Limited through a merger deal and finalised the process in January 2021.

It has also acquired Grobank in South Africa and now completed the acquisition of Mozambique’s African Banking Corporation.

Access Bank Plc, Nigeria’s tier-1 bank, is also finalising regulatory approvals to acquire 78.15 per cent shareholding in the African Banking Corporation of Botswana Limited (BancABC Botswana).

The value of the deal wasn’t disclosed, but the acquisition gives Herbert Wigwe-led Company a majority share in African Banking Corporation which is expected to rebrand and take the name of the Nigerian lender.

The plans, it was learnt, was to muster 30 percent of profit for this year from outside its base Nigeria, and break into eight countries in Africa, from Morocco to Angola, that have been marked down as markets of significant promise.

However, analysis of the capital market showed Access Bank’s value has weakened in the eyes of investors following the series of acquisitions aimed at strengthening its base outside the shores of Nigeria.

Within two days, investors have priced down the company’s stock, resulting in a loss of N8.9 billion for Access Bank shareholders.

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