Business Hilights
Tracking Nigeria's Headline Business News Online
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Access Bank to become Africa’s largest, most digital bank on merger—Wigwe

…As Dozie’s dynasty in Nigeria’s banking industry nosedives

Contrary to trending speculations before now, the Group Managing Director of Access Bank Plc., Mr. Herbert Wigwe has cleared the air, saying both his bank on Monday sealed a Memorandum of Agreement (MoA) with Diamond Bank Plc regarding a potential merger of the two banks.
He added that the emerging deal will among other things; create Nigeria and Africa’s largest retail bank by customers. This follows its selection as preferred bidder after a competitive process undertaken by the Board of Diamond Bank.

Business Hilights recalls that on November 12, 2018, we published an investigative story in the shaky nature of age long Dozie Dynasty in Nigeria’s banking industry; The story traced how the father of current Managing Director of the bank, Mr. Pascal Dozie built a world class banking institution that is currently facing extinction.

However, the proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.
Based on the agreement reached by the Boards of the two financial institutions, Diamond Bank shareholders will receive N3.13 per share, comprising (i.) a cash consideration of N1.00 (one Naira) per Diamond Bank Share representing a total cash amount of N23,160,388,968 (twenty-three billion, one hundred and sixty million, three hundred and eighty-eight thousand, nine hundred and sixty-eight Naira), or US$ 75,588,736.84 (seventy five million, five hundred and eighty eight thousand, seven hundred and thirty six dollars and eighty four cents) and;
(ii.) The allotment of 6,617,253,991 (six billion, six hundred and seventeen million two hundred and fifty-three thousand, nine hundred and ninety-one) new Access Bank ordinary shares, representing the two new Access Bank ordinary shares for every seven Diamond Bank shares.
The offer represents a premium of 260% to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange as of December 13, 2018, the date of the final binding offer.
The completion of a transaction would be subject to formal regulatory and shareholder approvals.
Reacting to the MoA, Wigwe, averred that “Access has a strong track record of acquisition and integration and has a clear growth strategy. Access and Diamond have complementary operations and similar values, and a merger with Diamond, with its leadership in digital and mobile-led retail banking, could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion. Access has a strong financial profile with attractive returns and a robust capital position with 20.1% CAR as at 30 September 2018. We believe that this platform, together with the two banks’ shared focus on innovation, financial inclusion and sustainability, can bring benefits to Access and Diamond customers, staff and shareholders.”

Diamond Dozie
Group Managing Director of Diamond Bank Plc, Mr. Uzoma Dozie

In his reaction, the CEO of Diamond Bank, Uzoma Dozie, said “The proposed combination with Access Bank will create one of Africa’s leading financial institutions. There is clear strategic rationale for the proposed merger and strong complementarities between the two institutions. While Diamond Bank has pioneered Nigeria’s largest technology-led retail banking platform, Access Bank is one of Nigeria’s leading full-service commercial banks. Consolidation in the Nigerian banking industry is an inevitable, natural progression in a sector where the gap between Tier 1 and Tier 2 banks has been widening and scale has become critical; where technology will disrupt the traditional business model while enabling broader financial inclusion”
Business Hilights further gathered that Citigroup Global Markets Limited and Chapel Hill Denham acted as Financial Advisers to Access Bank Plc and Banwo & Ighodalo, acted as Legal Advisers to Access Bank.
It would be recalled that Access Bank is a full service commercial bank operating through branches and service outlets located in major centres primarily across Nigeria and sub-Saharan Africa, as well as the United Kingdom (extension to United Arab Emirates (Dubai)), with representative offices in China, Lebanon, and India.
The Group provides a wide range of banking and other financial services to over 9 million customers from 392 branches and service centres.
Listed on the Nigerian Stock Exchange in 1998, the Bank serves its various markets through four business segments: Personal, Business, Commercial and Corporate & Investment Banking. The Bank has over 830,000 shareholders including several Nigerian and International Institutional Investors and has enjoyed what is arguably Africa’s most successful banking growth trajectory in the last twelve years ranking amongst Africa’s top 20 banks by total assets and capital in 2015.
As part of its continued growth strategy, Access Bank is focused on mainstreaming sustainable business practices into its operations. The Bank strives to deliver sustainable economic growth that is profitable, environmentally responsible and socially relevant.