CI VIEW: Nigeria’s Ecobank seen as acquisition target as new players enter continent, sources

 

WASHINGTON (CI Africa) – Pan-African listed financial group Ecobank Transnational International (NSE:ETIT) is becoming an increasingly appetizing acquisition target as new players such as Bob Diamond’s Atlas Merchant Capital and Qatar’s Qatar National Bank (QNB) aggressively build their footprint in the continent.

[Atlas Merchant Capital CEO and Founder Bob Diamond speaks to Capitol Intelligence using CI Glass at the IFC AI AfricaInvestor CEO Summit during the IMF World Bank Annual Meeting. Washington DC, October 9, 2014.]

Ecobank — with its 36 subsidiaries and major operations in Nigeria, Ghana, Kenya — is being viewed as a bank well positioned to rival to its established competitors in South Africa such as Standard Bank and Nedbank and the largest foreign bank in Africa, Singapore-based Standard Chartered Bank.

When approached by Capitol Intelligence, Ecobank Chairman Albert Essien did not categorically deny rumors that the bank was in merger talks with Diamond’s Atlas or with its current major shareholders Nedbank and QNB.

A source at QNB said that no shareholder can control more than a 20% stake in Ecobank and that he views a takeover by Atlas as unlikely.

However, Nigerian Finance Minister Ngozi Okonjo-Iweala speaking to Capitol Intelligence said she would have no problem with a takeover of Ecobank for the Nigerian market by Atlas or another foreign bank but said regulatory issues could be raised in other African markets.

However, Minister Okonjo-Iweala said she was scheduled to hold a bilateral meeting with Bob Diamond to discuss Atlas Merchant’s plans for the Nigerian market.

Diamond, who headed Barclays and was instrumental to its roll-out of its African ABSA network, said that his group has already completed two  financial service acquisition and is now finalizing its third deal.

Diamond said that Atlas’ ambition is to become the leading lending bank for small-to-medium size enterprises in Africa and to become the best bank in sub-Saharan Africa,

Standard Chartered deputy Chief Executive A. Michael G. Rees said he is not very concerned regarding the entry of new comers and Africa is not somewhere you can just parachute in.

Rees said that Standard Chartered has been operating in African since 1862 and those relationships cannot be built overnight.

However, there is little argument that Africa, the world’s greatest growth market, is now a battle ground for the world’s top investment groups and investment bankers.

Washington, DC-based The Carlyle Group — one of the largest private equity funds in the world – has already set-up of USD 700m Africa investment fund, Carlyle Managing Director Edward J. Mathias said.

 

[The Carlyle Group Managing Director Edward J. Mathias speaks to Capitol Intelligence using CI Glass at IFC AI AfricaInvestor CEO Summit during IMF World Bank Annual Meeting in Washington, DC on October 9, 2014.]

Mathias said the fund, which is primarily looking at Nigeria following its investment in Beira. Mozambique-based J&J Transport, is seeking smaller mid-market deals in the USD 50m rather than its traditional USD 500m or above deal targets. Mathias said the fund is also looking at Mozambique, Tanzania and Kenya for additional investments.

In fact, Carlyle co-founder David Rubenstein personally attended the IMF World Bank meeting as a private sector guest and strategic adviser.

The strategic interest of African for other US private equity majors such as Blackstone and KKR brought together all the major investment bankers to the IMF World Bank meeting such as Goldman Sachs, Credit Suisse, JP Morgan and Citigroup.

 

[JP Morgan Chairman for EMEA and former Italian Treasury Secretary Vittorio Grilli speaks to Capitol Intelligence using CI Glass at IMF World Bank Annual Meeting on October 10, 2014.]

Africa is no longer a emerging market investment opportunity but a market that every global group needs to be present,” said an IFC banker.

By PK Semler in Washington, DC.  For more information please call +1-202-549-3399 or email: pks@capitolintelgroup.com

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