Failure to secure CBN clearance forces termination of Access Bank’s planned acquisition of South Africa’s Bidvest Bank.
Access Bank Plc’s move to acquire South Africa’s Bidvest Bank has hit the rocks due to regulatory hurdles.
It was gathered that Access Bank had actually acquired the bank but had to await regulatory approval from the Central Bank of Nigeria (CBN) as required in the transaction agreement.
Though the transaction was not domiciled in Nigeria, yet approval from the CBN was required in its capacity as the primary regulator of the banking group and holding company.
Sources however, told THISDAY that CBN Governor, Mr. Olayemi Cardoso’s policy of orthodoxy meant that Access Bank must follow the process and duly comply with all forms and substance of regulation.
Sources also hinted that Cardoso was not particularly driven by commercial considerations of both parties, “he is a stickler to process,” he said
In the absence of the approval, therefore, the transaction could not progress, and was subsequently terminated after certain contractual conditions were not met by the Nigerian lender by the agreed stop date.
Moreover, it is yet unclear, if the deal could still be revived if finally CBN issues the much-awaited clearance.
The proposed transaction had significance beyond its commercial dimensions, carrying broader implications for Nigeria–South Africa economic relations.
The transaction was perceived as a positive signal of renewed cooperation and confidence between both markets, given previously strained relations.
However, the failure to conclude the transaction may therefore, be interpreted as diplomatically sensitive.
It is however, noteworthy that the transaction failure was not the result of any issues with South African regulatory authorities, nor a lack of willingness by the parties to proceed but purely regulation constrain on the Nigerian side.
The Bidvest Group had confirmed that the sale and purchase agreement between the parties incorporated customary conditions precedent, primarily related to regulatory approvals.
The parties engaged for months to secure the necessary approvals, but the deal fell through.
Bidvest disclosed that the strategic justification for reorganising its financial services division and selling off Bidvest Bank is still the same, bringing an end to a deal that was anticipated to increase Access Bank’s presence in South Africa.
