The earlier announcement on July 8, 2020, the Board of Access Bank Plc, on Friday disclosed that its subsidiary, Access Bank (Zambia) Limited (“ABZ”) has entered into a definitive agreement with Cavmont Capital Holdings Zambia Plc (CCHZ) regarding a proposed acquisition of Cavmont Bank Limited, a subsidiary of CCHZ and subsequent merger of Cavmont Bank’s operations into ABZ.

The transaction which is expected to be completed during the fourth quarter of 2020 remains subject to relevant shareholder and regulatory approvals will position the enlarged ABZ as one of the top 10 banks in Zambia and create the momentum to advance its strategic objectives the lender stated

In a filing with the Nigerian Stock Exchange, Access Bank observed that this is a highly complementary transaction, combining ABZ’s wholesale and trade finance capabilities with Cavmont Bank’s retail and commercial banking operations.

It noted that customers of the enlarged bank will benefit from greater security offered by what will be one of the most capitalised banks in Zambia with a more diversified product and service offering and a broader geographical footprint and infrastructure.

The enlarged bank will be well-placed to participate in the long-term economic growth of Zambia, predicated on the country’s vast reserves of natural resources and fast-growing young population.

Under the terms of the agreement, ABZ will acquire the entire issued ordinary share capital, assets and liabilities of Cavmont Bank while Capricorn Group Limited, the ultimate majority shareholder of CCHZ, will invest at least ZMW300 million (c. US$16.5 million) of preference shares into ABZ.

Capricorn will hold preference shares in the enlarged ABZ for a period of five years, after which the preference shares will be acquired by Access Bank Plc.

Commenting on the transaction, Herbert Wigwe, Group Managing Director of Access Bank Plc, said “Access Bank is focused on building the scale needed to become a leading bank in its key operating markets through leveraging the right partnerships.

“This transaction underscores our approach and is another stepping stone towards delivering on our strategic aspirations of becoming the World’s Most Respected African Bank and Africa’s Gateway to the World.

“It will strengthen our presence in Zambia, while furthering our footprint for growth in the COMESA region, Africa’s largest free trade area.

“Over the years, we have worked hard to build a sustainable international bank of African origin that can expand the potential of businesses, support economic prosperity, facilitate trade and investment and extend the power of banking to millions of people who do not yet have the financial tools to achieve their dreams. This proposed transaction aligns with that strategy.”

Thinus Prinsloo, Managing Director of Capricorn Group, said “Access Bank is an African banking group with an impressive growth trajectory and geographic reach across Africa and internationally. This transaction is an excellent Strategic fit with Cavmont Bank’s presence in Zambia and will strengthen the capital base from which to achieve long-term sustainable growth.

“Zambia is an economy with significant growth potential that is poised for a robust recovery, and this combination best positions the combined bank to harness these opportunities.”

Similarly, the Managing Director of Cavmont Bank, Peet van der Walt stated that “Cavmont Bank’s vision is to be a world-class bank, rated amongst the best in Zambia. This proposed merger with Access Bank Zambia accelerates our strategy and positions us as a top ten bank in the country.

“As a subsidiary of one of the largest banking groups in Africa, Access Bank Zambia has the scale, capabilities and ambition to enable the combined bank to pursue exciting strategic opportunities in Zambia.

“Our customers will benefit from greater security offered by one of the most capitalised banks in the country, increased scale in Zambia, access to a broader digital and retail offering, and a geographic network across the continent. We look forward to working closely with Access Bank to deliver the benefits of the merger to all the stakeholders”.

Access Bank wants shareholders to note that the cautionary announcement dated July 8, 2020 is hereby withdrawn and shareholders are no longer required to exercise caution when dealing in the group’s shares in relation to the potential transaction.