Atlas Mara Deal With Kenya’s Equity Group Holdings Expires

(Bloomberg) --

Bob Diamond’s plans to scale down his business in Africa are being delayed after Atlas Mara Ltd. failed to agree on initial terms for Kenya’s Equity Group Holdings Plc to takeover some of its operations, with both companies committing to reaching a deal early this year.

Equity Group and Atlas Mara are yet to sign a detailed pact that will see the company founded by the former Barclays Plc chief executive officer exit four African countries, Equity Group said in a statement Thursday. The preliminary agreement signed in April -- which would’ve given Atlas Mara a 6.3% stake in Equity Group in exchange for the units -- expired, it said.

“While there is no assurance that the potential transaction will be concluded on the terms previously announced, the parties continue to be engaged in discussions, with the objective to reach mutually-acceptable terms as soon as practicable in early 2020,” Atlas Mara said in a separate statement. The company said in September that the due-diligence process had been substantially completed.

The transaction would mark a change in strategy for 68-year-old Diamond, whose Atlas Mara misjudged the caliber of competition in Africa and ultimately paid too much for acquisitions. If the deal with Equity Group goes ahead, Atlas Mara would be left with operations in Nigeria, Botswana and Zimbabwe after switching out its businesses in Rwanda, Tanzania, Zambia and Mozambique. A deal would need the approval of regulators in the different jurisdictions.

For the Kenyan lender, a transaction would help Managing Director James Mwangi’s efforts to expand Equity Group into 15 nations on the continent by 2026, from six markets, to benefit from rising regional trade and the increased use of digital banking services.

Shares in Atlas Mara declined 1.4% by 1:52 p.m. in London after sliding more than 24% over the past two years, hitting a record low in September. Equity Group rose as much as 1.9% on Thursday, having gained 26% in 2019.

©2020 Bloomberg L.P.

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