Union Bank to divest shares in UK subsidiary for undisclosed fee

Union Bank has entered a share sale and purchase agreement to divest 100% of its equity stake of its UK subsidiary, Union Bank UK Plc.

In a notice filed by the lender to the Nigerian Bourse, the intended sale was to allow the Bank geographically streamline its business operations to focus on growth opportunities in Nigeria.

MBU BidCo Limited, an acquisition facility wholly owned by MBU Capital Limited, was selected as the preferred bidder after a highly competitive bid process.

However, the completion of the sale is subject to regulatory approvals from relevant regulatory authorities in Nigeria and the United Kingdom.

Emeka Emuwa, Chief Executive Officer of Union Bank explained that the lender had identified certain opportunities in Nigeria and the Nigerian market presented robust and long-term opportunities for the banking institution, hence the planned divestment.

"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.

This divestment allows us to channel our focus and capital towards mining those opportunities fully. 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," he said.

Commenting on the terms of sale the Bank Chief said the UK subsidiary was quite valuable and promised to entrust the subsidiary to a high-quality financial institution that will spur it to greater heights.

"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,” he explained.

Mohammed Iqbal, Founder, and CEO of MBU Capital was overjoyed at the latest acquisition.

“We are delighted to announce the acquisition of Union Bank UK, subject to regulatory approval. We see a huge opportunity to build on UBUK’s strengths in international markets to create a new-style bank that is focused on the needs of UK and international SMEs and entrepreneurs. Many of these customers are seeking a bank that truly understands the needs of entrepreneurial, fast-growing businesses. We believe that our acquisition and vision for UBUK offers the potential for significant growth for the bank.

We look forward to working with our new colleagues at UBUK to continue to service the needs of its clients. We also look forward to sustaining and deepening relationships with UBUK’s existing trading partners,” he commented.

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.