Kenyan tycoon James Mwangi-led lender grows stronger with $47-million Cogebanque deal

Equity Group, led by Kenyan banking tycoon James Mwangi, has successfully concluded the acquisition of a 99.13-percent stake in Compagnie Générale De Banque (Cogebanque) in a deal valued at Ksh7.2 billion ($47 million)—solidifying its commitment to East African operations.

The completion of its strategic acquisition of Rwanda’s Cogebanque marks a crucial step in its ongoing efforts to strengthen its presence in East Africa — it comes as the lender under Mwangi looks to diversify and boost its earnings beyond the Kenyan market.

Equity Group seals $47-million deal, surpassing 99-percent ownership in Cogebanque

In a recent statement, Equity Group revealed that it had acquired an additional 7.2-percent stake from minority shareholders — bringing its total stake to 99.13 percent. The acquisition cost of Ksh7.2 billion ($47 million) reflects the conglomerate’s commitment to fortifying its subsidiaries, with Cogebanque now officially a subsidiary of Equity Group.

The latest deal was executed after it entered into a share purchase agreement with the sellers on July 28, 2023 — the Nairobi-based lender simultaneously extended an offer to minority shareholders to acquire their shares at the same price per share.

The successful completion of the deal on Nov. 30, 2023, saw Equity Group broker a deal with the minority shareholders — not initially part of the agreement — to acquire shares worth Ksh528.4 million ($3.5 million).

Strategic expansion drives Equity Group’s 5.3-percent profit surge

The move aligns with its strategy to bolster earnings and revenue by expanding its reach across East Africa. Its unaudited financial statements for the nine months ending Sept. 30, 2023, revealed a 5.3-percent year-on-year increase in profit, reaching Ksh36.2 billion ($237.4 million).

Notably, the growth was propelled by double-digit growth from subsidiaries in East Africa, including operations in the Democratic Republic of Congo (DRC), Uganda, Rwanda, and Tanzania.

DRC unit powers Equity Group’s profits, outshining Kenyan unit

Mwangi, the driving force behind Equity Group, credited the success to the growing influence of its subsidiaries, particularly the DRC unit. With the DRC unit accounting for 60 percent of Kenya’s asset base, it has emerged as a contributor to the group’s profits — surpassing other subsidiaries and even outperforming the Kenyan unit.

As Equity Group solidifies its position in East Africa through strategic acquisitions, the conglomerate remains optimistic about future prospects. The acquisition of Cogebanque is expected to contribute positively to the group’s financial performance, demonstrating the effectiveness of its diversification strategy and commitment to regional economic growth.