On 2nd August 2022, KCB Group announced the proposed acquisition of an 85.00% shareholding in the Trust Merchant Bank SA of DR Congo, with an option for a full takeover in two years. Subject to regulatory and shareholders’ approval, the completion of the transaction will see KCB acquire control of TMB and open doors for an entry into the much-coveted DRC market. Assuming a similar timeline to the Equity Group’s acquisition of BCDC Bank in 2020, we expect the transaction to be completed in Q1’23.
KCB is expected to pay a cash consideration which we estimate will be KES 15.73Bn – KES 18.51Bn. The transaction is priced at a P/Bv of 1.49x which is 44.66% above the average transaction multiple of 1.03x for regional takeover deals involving Kenyan banks since 2020. However, given the potential in the Congolese market and the growth figures we have seen within TMB, we expect the purchase to be a worthwhile venture in the future.
