Nigeria’s Access Bank PLC agreed to take over struggling local rival Diamond Bank PLC in a deal worth about US$200 million that would create the nation’s biggest lender by assets.
Both companies’ shares rose.
Access is to buy Diamond for 72.5 billion naira (US$199 million), with almost one-third of that being paid for in cash and the rest in shares, the Lagos-based lenders said in statements to the Nigerian Stock Exchange on Monday.
The offer price of 3.13 naira per share is more than triple Diamond’s previous closing price.
Carlyle Group, the US private-equity firm, bought almost one-fifth of Diamond in 2014, its first-ever Nigerian deal.
Since then, the value of the stake has tanked amid an economic slowdown in the oil-driven economy that sent bad loans soaring.
The lender was last month downgraded by both Moody’s Investors Service and S&P Global Ratings to “CCC.”
“The merger will be a positive for Access Bank,” Lagos-based CSL Research said in a note to clients. “Diamond Bank has a strong retail franchise, especially on the liability side, giving it the lowest funding cost among peers.”
If the takeover is approved, Access’ assets could swell to about US$17 billion from US$12.5 billion, according to Bloomberg calculations.
Zenith Bank PLC is the largest Nigerian lender, with US$15.4 billion of assets.
The combined entity would have the largest number of retail customers in Africa, Diamond said in a statement.
Citigroup Inc and Chapel Hill Denham, a Lagos-based investment bank, were advising Access on the deal, while Exotix Partners LLP was advising Diamond.
The offer is a 260 percent premium to Diamond’s closing price of 0.87 naira a share on Thursday last week.
Its stock rose 9.5 percent in Lagos on Monday to close at 1.04 naira, far below the offer price, but paring its losses this year to 31 percent. Access shares climbed 9.4 percent to 8.15 naira.
Nigeria’s banking sector faced government bailouts after a credit crunch in 2009.
While the country’s biggest lenders now have strong capital buffers, and solid assets and earnings, small lenders have been struggling to recover from the economy’s contraction two years ago.
In September, Skye Bank collapsed and the Central Bank of Nigeria established Polaris Bank to take over its assets and liabilities and asked Asset Management Corp of Nigeria to capitalize the new entity.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts