CEM REPORT | Titan Trust Bank Monday, formalized the acquisition of 89 per cent of Union Bank of Nigeria (UBN) Plc in an off-market deal worth N191 billion.
According to trading report at the Nigerian Exchange (NGX), a total of 27.34 billion ordinary shares of UBN were swapped in block divestment. Market sources said the cross deal was the culmination of the transaction between TTB and Union Global Partners Limited, Atlas Mara Limited and other shareholders.
According to news sources, capital market analysts noted that, “the acquisition stands as the biggest in recent years, dwarfing the N120 billion Crown Mills paid to acquire Dangote Flour Mills and the N91 billion NIPCO paid for a majority share in Mobil Nigeria. Also, this is the biggest deal in the banking space since the N72 billion merger between Access Bank and Diamond Bank Plc.”
A total of 19 cross deals were done through the negotiated window of the NGX at N7 per share, indicating transaction value of N191.4 billion.
The transfer of shares effectively signified a conclusion of the divestment deal announced in December 2021 between the old and new generations’ banks and approval of the transaction by all regulators including the Central Bank of Nigeria, Securities and Exchange Commission and NGX.
Speaking on the transaction, the chair, Union Bank, Mrs Beatrice Bassey, said, “On behalf of the board, we congratulate all the parties involved in reaching this phase of the transaction and the board looks forward to supporting the next steps to ensure a seamless completion of the process following regulatory approvals.
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“We are grateful to our current investors whose significant and consequential investments over the past nine years facilitated the transformation of Union Bank, one of Nigeria’s oldest and storied institutions.
“Today, the bank is well-positioned with an innovative product offering, a growing customer base of over six million and consistent year on year profitability.”
While Titan Trust Bank is barely 2 years in existence having commenced operation in October 2019, Union Bank of Nigeria is one the once vibrant banks in the Nigerian banking industry rich whose history can be traced to 1917 when it was first established as Colonial Bank.
In 1925 the bank became known as Barclays Bank DCO (Dominion, Colonial and Overseas) resulting from its acquisition by Barclays Bank. Following Nigeria’s independence and the enactment of the Companies Act of 1968, the bank was incorporated as Barclays Bank of Nigeria Limited (BBNL, est. 1969).
Between 1971 and 1979, the bank went through a series of changes including its listing on the NSE and share acquisitions/transfers driven by the Nigerian Enterprises Promotion Acts (1972 and 1977); this resulted in its evolution into a new wholly Nigerian-owned entity. To reflect the new ownership structure, and in compliance with the Companies and Allied Matters Act of 1990, it assumed the name Union Bank of Nigeria Plc. (UBN “the Bank” or “Union Bank”).
In 1993, in line with its privatisation/commercialisation drive, the Federal Government divested by selling its controlling shares (51.67%) to private investors. Thus, Union Bank became fully owned by Nigerian citizens and organizations all within the private sector.
Union Bank of Nigeria Plc acquired the former Universal Trust Bank Plc and Broad Bank Ltd. and absorbed its one-time subsidiary, Union Merchant Bank Ltd.
Following the banking crisis in 2009 and the intervention of the CBN via Asset Management Company of Nigeria (AMCON), the bank was recapitalized in 2012 with an injection of $500 million by Union Global Partners Limited (UGPL), a consortium of local and international investors. UGPL acquired 65% of the bank’s shareholding and in the last quarter of 2014, AMCON’s remaining 20% stake in the bank was acquired by Atlas Mara. UGPL comprises Africa Capital Alliance, ADC African Development Corporation, Corsair Capital, FMO (the Netherlands Development Finance Company), Chandler Corporation, Standard Chartered Private Equity