VENTURES AFRICA – Access Bank’s merger deal with the defunct Intercontinental Bank in 2011 has been adjudged Africa’s top merger and acquisition (M&A) deal by the Banker Magazine, a business daily has reported.
The Banker Magazine, a member of the Financial Times stable of publications, selected the Access Bank and Intercontinental Bank deal as the “2012 Mergers and Acquisitions Deal of the Year” for Africa.
The Banker’s Deals of the Year Awards celebrate the most impressive transactions in capital raising, M&A Corporate and SSA bonds, infrastructure and project finance, loans, structured finance, equities, restructuring, Islamic finance and this year a newly added trade finance category.
Many deals were undertaken in very difficult market conditions, while banks from emerging markets are noticeably playing a larger role in the top transaction in their countries.
Also commended in The Bankers’ Deals of the Year Award for 2012 is the Access Bank led Delta State government 50 billion naira bond in the Bond of The Year Category won by Namibia’s $500 million Deal. Namibia became the latest of a growing list of Africans sovereigns to issue an international bond when it sold $500 million of paper in late October 2011. The 10-year transaction followed a debut Eurobond from Nigeria and Senegal’s first benchmark-sized deal, both of which took place in the first half of 2011.
In the category, the Access Bank-led Delta State N50 billion ($317 million) 14 percent seven-year bond in September 2011 was a major contender. The transaction, which was the first tranche of a-N100 billion bond programme and the biggest launched by a Nigerian state, will be used to help the state build infrastructure and ensure it generates majority of its revenues internally, rather than having to rely on the Federal Government.
In 2011, Access Bank embarked on the seamless acquisition of Intercontinental Bank, following Nigeria’s 2009 banking crisis. Intercontinental’s failure of Central Bank of Nigeria’s (CBN) stress-test, coupled with other shortcomings towards CBN regulations triggered the approval by the CBN for the bank and others to be sold, in order to save depositors of their investments.
The government had injected capital into the bank (and other 9 banks) and given it two years to recapitalise – stand on its own feet. When it was evident that the case would not change, CBN approved the sale.
Intercontinental Bank has since been integrated into the bank making Access one of the top five banks in Nigeria.
The acquisition has substantially changed the face of the Nigeria banking sector as Access Bank entered into the top tier, which previously comprised First Bank, Zenith Bank, Guaranty Trust Bank (GT Bank) and United Bank for Africa, (UBA).
Access Bank has risen to become the third largest Nigerian bank by assets. The bank’s acquisition increased competition in an already fierce retail market in Nigeria and could well drive down costs for consumers.