Conglomerate sells bank unit to Access Bank for R2.8bn and FinGlobal to Momentum Group
12 December 2024 - 11:23
UPDATED 12 December 2024 - 19:36
by Michelle Gumede and Jacqueline Mackenzie
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Bidvest Bank Head office in Sandton. Picture: FREDDY MAVUNDA/BUSINESS DAY
Bidvest has agreed to sell Bidvest Bank to Access Bank of Nigeria for about R2.8bn as the dismantling of its financial services unit gathers pace.
The diversified industrial group also announced the sale of FinGlobal to Momentum Group for an undisclosed amount and said offers for Bidvest Life were rolling in.
“One of these offers will be advanced to an agreement in the coming weeks,” Bidvest said in a statement on Thursday.
The proceeds from the Bidvest Bank disposal will be used to settle debt, it added. Acquisitions of R3.3bn and working capital investments of R2.1bn led to a R3.4bn increase in gross debt to R31.8bn in the year to end-June. Net debt rose R3.6bn to R22.7bn after cash and cash equivalents.
Bidvest announced the planned sale of Bidvest Bank and FinGlobal in July, saying the bank required committed financial services ownership to scale up and sustainably grow in the face rapid technology advances and fierce competition.
Access Bank boasts more than 60-million customers globally with a network of more than 700 branches in 23 countries across three continents.
“As a well-respected, experienced and prominent financial services entity, I am very pleased that Access Bank meets our original principle to provide reassurance for the continued sustainability and prosperity of Bidvest Bank,” CEO Mpumi Madisa said.
“This provides an exciting future for Bidvest Bank, enabling it to advance, scale up and grow in today’s fast-changing, technology-driven and highly competitive financial sector.”
Bidvest acquired Rennies Foreign Exchange in 1998 as part of the Rennies Group takeover. After obtaining a banking licence from the Reserve Bank, Rennies Foreign Exchange changed its name to Rennies Bank in 2000 and in 2007 it was renamed Bidvest Bank.
Access Bank, which has been operating in SA since 2021 when it acquired Grobank, employs more than 8,400 people in Nigeria, 16 subsidiaries in Africa and the UK, and representative offices in China, Hong Kong, the UAE, India, and France.
Bidvest said it would continue to support the bank to ensure operational stability and financial soundness.
Access Bank intends to introduce broad-based BEE ownership, including an employee stock ownership plan.
The transaction is subject to regulatory approvals, which Bidvest expects will take six months, implying an expected effective date before the end of the group’s current financial year.
Besides FinGlobal and Bidvest Life, Bidvests’ remaining short-term insurance businesses — which are mostly focused on auto insurance coverage and other value-added products — were moved to the automotive division after the end of the group’s financial year.
The group said FinGlobal’s financial emigration services for SA expatriates would benefit from Momentum’s size and complementing capabilities. All employees would be retained as part of the transaction, it added.
With an emphasis on expanding businesses and regions, Bidvest has stuck to its acquisition strategy even as it leaves the banking industry.
Armed with a €395m global war chest and R16bn locally , the group concluded 11 acquisitions in its financial year to end-June. It also doubled its footprint in Australia, marked its entry into hygiene services in the Asia-Pacific market and shored up the scale and broader offerings in the UK, Ireland and SA.
Bidvest has several acquisitions under way, including the purchase of Citron Hygiene from Birch Hill Equity Partners and other investors, which awaits UK regulatory approval.
Bidvest Bank, FinGlobal and Bidvest Life will be disclosed as a disposal group held for sale in the consolidated Bidvest financial statements for the financial year which commenced on July 1 2024.
Bidvest shares ended the day little changed at R279.02, having gained as much as 4.43% earlier.
Update: December 12 2024 This story has been updated with new information.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Bidvest steps up exit from financial services
Conglomerate sells bank unit to Access Bank for R2.8bn and FinGlobal to Momentum Group
Bidvest has agreed to sell Bidvest Bank to Access Bank of Nigeria for about R2.8bn as the dismantling of its financial services unit gathers pace.
The diversified industrial group also announced the sale of FinGlobal to Momentum Group for an undisclosed amount and said offers for Bidvest Life were rolling in.
“One of these offers will be advanced to an agreement in the coming weeks,” Bidvest said in a statement on Thursday.
The proceeds from the Bidvest Bank disposal will be used to settle debt, it added. Acquisitions of R3.3bn and working capital investments of R2.1bn led to a R3.4bn increase in gross debt to R31.8bn in the year to end-June. Net debt rose R3.6bn to R22.7bn after cash and cash equivalents.
Bidvest announced the planned sale of Bidvest Bank and FinGlobal in July, saying the bank required committed financial services ownership to scale up and sustainably grow in the face rapid technology advances and fierce competition.
Access Bank boasts more than 60-million customers globally with a network of more than 700 branches in 23 countries across three continents.
“As a well-respected, experienced and prominent financial services entity, I am very pleased that Access Bank meets our original principle to provide reassurance for the continued sustainability and prosperity of Bidvest Bank,” CEO Mpumi Madisa said.
“This provides an exciting future for Bidvest Bank, enabling it to advance, scale up and grow in today’s fast-changing, technology-driven and highly competitive financial sector.”
Bidvest acquired Rennies Foreign Exchange in 1998 as part of the Rennies Group takeover. After obtaining a banking licence from the Reserve Bank, Rennies Foreign Exchange changed its name to Rennies Bank in 2000 and in 2007 it was renamed Bidvest Bank.
Access Bank, which has been operating in SA since 2021 when it acquired Grobank, employs more than 8,400 people in Nigeria, 16 subsidiaries in Africa and the UK, and representative offices in China, Hong Kong, the UAE, India, and France.
Bidvest said it would continue to support the bank to ensure operational stability and financial soundness.
Access Bank intends to introduce broad-based BEE ownership, including an employee stock ownership plan.
The transaction is subject to regulatory approvals, which Bidvest expects will take six months, implying an expected effective date before the end of the group’s current financial year.
Besides FinGlobal and Bidvest Life, Bidvests’ remaining short-term insurance businesses — which are mostly focused on auto insurance coverage and other value-added products — were moved to the automotive division after the end of the group’s financial year.
The group said FinGlobal’s financial emigration services for SA expatriates would benefit from Momentum’s size and complementing capabilities. All employees would be retained as part of the transaction, it added.
With an emphasis on expanding businesses and regions, Bidvest has stuck to its acquisition strategy even as it leaves the banking industry.
Armed with a €395m global war chest and R16bn locally , the group concluded 11 acquisitions in its financial year to end-June. It also doubled its footprint in Australia, marked its entry into hygiene services in the Asia-Pacific market and shored up the scale and broader offerings in the UK, Ireland and SA.
Bidvest has several acquisitions under way, including the purchase of Citron Hygiene from Birch Hill Equity Partners and other investors, which awaits UK regulatory approval.
Bidvest Bank, FinGlobal and Bidvest Life will be disclosed as a disposal group held for sale in the consolidated Bidvest financial statements for the financial year which commenced on July 1 2024.
Bidvest shares ended the day little changed at R279.02, having gained as much as 4.43% earlier.
Update: December 12 2024
This story has been updated with new information.
gumedemi@businesslive.co.za
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