Quest For Market Consolidation Forces Union Bank To Sell UK Subsidiary

Nigeria’s Union Bank Plc on Tuesday said it has entered a share sale and purchase agreement with a London based firm to divest its 100 equity stake in its United Kingdom (UK) subsidiary.
The bank disclosed this in a regulatory filing with the Nigerian Stock Exchange (NSE) and noted that the sale is aligned with its strategy to geographically streamline its business operations to focus on growth opportunities in Nigeria.
In the communication to the NSE, the bank said following a competitive bid process, MBU BidCo Limited, an acquisition vehicle wholly owned by MBU Capital Limited has been selected as the preferred bidder to assume ownership of the Union Bank UK Plc.
“The completion of the sale is subject to regulatory approvals from the relevant regulatory authorities in Nigeria and the United Kingdom,” the bank said.
Emeka Emuwa, union Bank chief executive officer, in his comment on the divestment said the divestment will allow the bank to channel its focus and capital towards exploring the opportunities in the Nigerian digital and agency banking market.
“As the banking landscape shifts towards digital and agency banking to drive financial inclusion, the Nigerian market presents robust long-term opportunities for Union Bank,” Emuwa, a former Citibank local unit CEO said.
Though the bank did not disclose the amount it will realise from sales of its UK subsidiary, the CEO said the term of the divestment “delivers substantial value to our shareholders.”
“Through the sale, we are better positioned to deliver greater value to the organization and its stakeholders as well as continue to build the future of banking in Nigeria.
“The terms of the sale of UBUK delivers substantial value to our shareholders, while also entrusting its customers and trading partners to a high-quality financial services institution who will work with existing management to deliver a stronger and more profitable entity.”
Union Bank said Chapel Hill Denham Advisory Limited acted as Financial Advisers while White & Case LLP and Udo Udoma & Belo-Osagie acted as UK Legal Advisers and Nigeria Legal Advisers respectively to Union Bank.
Syndeo Capital Limited (led by Mandeep Ahluwalia) acted as Advisers to MBU Capital with Akin Gump LLP as Legal Advisers and PwC as Financial and Tax Advisers.