Nigeria's Access Bank said on Thursday it will spend 50 billion naira to acquire a 75 percent stake in rescued rival Intercontinental Bank and combine both firms'operations within 12 months of the merger.
Access Bank is the firstof four lenders to announce plans on how it intends to integrate with a rescued bank after signing merger agreements in July, a move long-suffering shareholders hope marks the beginning of the end of the banking crisis.
Nigeria's Access Bank rose 2.33 percent to 5.70 naira, bucking a downward trend on thelocal bourse, which shed1 percent.
Access chief executive, Aigboje Aig-Imokhuede told a conference call the combined Access Bank would become oneof the top three lendersby assets in the country, developing a network of over 500 branches after the merger.
"Access has critically analysed inorganic growth opportunities asthey have arisen ... the transaction enhances our retail banking offering and extensivelyincreases our distribution platform," Aig-Imokhuede said.
He said the capital injection will take Intercontinental over the regulatory 10 percent minimum capital adequacy levels.
Shareholders of both institutions will need to vote on the merger at the end of the month, he said. The combined entity will remain listed on the Nigerian Stock Exchange, he said, adding that he expectedto complete the transaction by September 30.
Aig-Imokhuede said shareholders in Intercontinental Bank will own 10 percent of the merged entity, withAMCON, the government "bad bank" created to recapitalise nine rescued banks in 2009, getting 15 percent.
"The dilution effect of the transaction on Access shareholders will be ... at best case 4 percent and at worst case 6 percent ... after the merger," he told a conference call with investors.(234NEXT)
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