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Merger and Acquisition

Strategic Capital Investment Ltd Acquires Polaris Bank for N1.355 Trillion

The Central Bank of Nigeria (CBN) has completed the sales of Polaris Bank to Strategic Capital Investment Limited (SCIL), a new core investor.

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Polaris Bank

The Central Bank of Nigeria (CBN) has completed the sales of Polaris Bank to Strategic Capital Investment Limited (SCIL), a new core investor.

In a statement signed by Osita Nwanisobi, Director of Corporate Communications, SCIL has acquired 100% equity in Polaris Bank.

According to the statement, SCIL paid N50 billion to acquire the equity and has accepted the terms of the agreement which include the full repayment of the sum of N1.305 trillion, being the consideration bonds injected into the bridge bank through AMCON, to be repaid over a 25-year period.

Explaining the reasons for the sales, the CBN said it will prevent the imminent collapse of the bank, enable its stabilisation and recovery, protect depositors’ fund, prevent job losses and preserve systemic financial stability.

Commenting on the transaction Mr. Godwin I. Emefiele, Governor of the Central Bank of Nigeria said: “This sale marks the completion of a landmark intervention in a strategic institution in the Nigerian banking sector by the CBN and AMCON.

“We commend the outgoing board and management for their vital role since the bridge bank was established; in stabilising the Bank’s operations, its balance sheet and implementing strong governance structures to address the issues that led to the intervention.

“This process has provided the CBN with an unprecedented opportunity to recover its intervention funds in full and promote financial stability and inclusive growth. We wish SCIL well as they implement growth plans to build the bank from the strong foundations that have been established.”

Divestment Committee (the ‘Committee’) comprising representatives of the CBN and AMCON, and advised by legal and financial consultants. The Committee conducted a sale process by ‘private treaty’, as provided in Section 34(5) of the AMCON Act to avoid negative speculations, retain value and preserve financial system stability.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Merger and Acquisition

Eni’s Strategic Shift: Nigerian Agip Oil Co. Sold to Oando PLC

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Oando Plc

Italian energy giant Eni has unveiled its plan to sell its exploration and production subsidiary, Nigerian Agip Oil Co. (NAOC), to indigenous energy solutions provider, Oando PLC.

This strategic move aligns with Eni’s 2023-26 strategy and awaits approval from local and regulatory authorities.

Eni’s decision to divest its onshore assets is driven by various factors, including ongoing oil thefts and spills and a shift towards more focused exploration budgets.

The Nigerian Agip Oil Company primarily operates in onshore oil and gas production and power generation.

It holds interests in four onshore blocks, oil mining licences (OMLs), two onshore exploration leases, and two power plants within Nigeria.

Previously, Eni held a 20% stake in four OMLs, with Oando also having a 20% stake, while the remaining 60% was owned by NNPC E&P.

Production from these assets feeds into the Obiafu-Obrikom plant and the Brass terminal, contributing 24,000 barrels of oil equivalent per day to Eni’s net production in 2022.

Eni further exports a substantial portion of its gas production from these licences to the Nigeria LNG (NLNG) plant, where it maintains a 10.4% interest, with additional gas going to the Okpai plant and another open-cycle plant in Rivers State.

Ongoing efforts in the area include workovers to mitigate mature field decline and the development of new compressors to reduce gas flaring.

NAOC also manages the Okpai 1 and 2 power plants, boasting a combined capacity of 960 MW, along with two onshore exploration areas, OPL 282 and 135, where it holds 90% and 48% stakes, respectively.

Despite this divestment, Eni affirms its commitment to Nigeria through Nigerian Agip Exploration and Agip Energy and Natural Resources, as well as its continued involvement in onshore and offshore assets operated by others. Eni will also retain NAOC’s 5% interest in the Shell Production Development Company joint venture.

Wale Tinubu, CEO of Oando Group, expressed excitement about the deal’s potential to unlock unprecedented opportunities for the Nigerian energy company. This transaction aligns with Oando’s strategy of acquiring, enhancing, appraising, and efficiently developing reserves.

Oando’s acquisition of NAOC includes 40 discovered fields, with 24 currently in production, as well as 12 production stations, 1,490 km of pipelines, and three gas processing plants.

This purchase will significantly bolster Oando’s reserves, increasing them from 503.3 million barrels of oil equivalent (boe) to a formidable 996.2 million boe.

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Merger and Acquisition

Access Bank Acquires Standard Chartered’s African Subsidiaries, Expanding its Global Footprint

The subsidiaries to be acquired by Access Bank include those in Angola, Cameroon, Gambia, and Sierra Leone, along with Standard Chartered’s consumer, private, and business banking business in Tanzania.

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Access bank

Access Bank, a leading Nigerian financial institution, has reached an agreement to acquire Standard Chartered’s subsidiaries in five sub-Saharan African countries.

This strategic deal marks the success of Standard Chartered’s divestment plan announced last year, which aimed to streamline its operations and focus on faster-growing markets in the region.

The subsidiaries to be acquired by Access Bank include those in Angola, Cameroon, Gambia, and Sierra Leone, along with Standard Chartered’s consumer, private, and business banking business in Tanzania. As part of the agreement, Access Bank will assume responsibility for providing uninterrupted banking services to the employees and clients of Standard Chartered’s businesses in these countries.

Standard Chartered’s decision to divest its African subsidiaries aligns with its global strategy, which seeks to enhance operational efficiencies, reduce complexity, and drive scale. By redirecting resources within the Africa and Middle East (AME) region, Standard Chartered aims to capitalize on other areas with substantial growth potential.

The deal signifies a major step forward for Access Bank, solidifying its position as a leading player in the African banking landscape. With recent expansions in Europe and an extensive presence in key trading corridors across Africa, Access Bank is poised to build a robust global franchise.

The acquisition will enable Access Bank to serve as a gateway for payments, investment, and trade within Africa and between Africa and the rest of the world.

The value of the transaction remains undisclosed, and the completion of the deal is expected within the next year, pending regulatory approvals in the respective countries, as well as in Nigeria.

Sunil Kaushal, Standard Chartered’s regional CEO for AME, expressed confidence in the strategic decision, emphasizing the opportunity it provides to reallocate resources to high-growth areas within the region. This move allows Standard Chartered to optimize its operations and further strengthen its position in markets poised for expansion.

Roosevelt Ogbonna, Access Group Managing Director, commented on the acquisition, highlighting the bank’s commitment to bridging the gap between cross-border and domestic transfers across all business segments. With a focus on facilitating seamless transactions and enhancing connectivity, Access Bank aims to foster increased trade and investment within Africa and beyond.

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Merger and Acquisition

Visa Makes a Billion-Dollar Move: Acquires Brazilian Startup Pismo to Expand Fintech Reach

Visa’s $1 Billion Acquisition of Pismo Signals Fintech Expansion into Latin America

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Visa Inc

Credit card giant Visa has announced its acquisition of Pismo, a Brazilian payments infrastructure startup, for a staggering $1 billion in cash.

This landmark deal is set to be one of the most significant fintech mergers and acquisitions of the year thus far.

Founded in 2016 by Juliana Motta, Ricardo Josua, Daniela Binatti, and Marcelo Parise, Pismo has quietly garnered an impressive list of high-profile clients, including Citi, Itaú (one of Brazil’s largest banks), Revolut, N26, Nubank, and Cora. The startup’s operations extend beyond Brazil, with a presence in several Latin American countries, the United States, Europe, as well as select markets in India, Southeast Asia, and Australia.

Pismo’s cloud-native issuer processing and core banking platform have been pivotal in providing banks, fintechs, and other financial institutions with the much-needed flexibility and agility to launch innovative products. Its services encompass card and payment solutions, digital banking, digital wallets, and marketplaces. Pismo also prides itself on empowering financial institutions to take control of their core data and utilize it intelligently.

By acquiring Pismo, Visa aims to bolster its capabilities in core banking and issuer processing across debit, prepaid, credit, and commercial cards. The startup’s platform will enable Visa to support emerging payment rails, such as Brazil’s Pix, and provide enhanced connectivity for its financial institution clients. The acquisition aligns with Visa’s strategic vision to offer differentiated issuer solutions and strengthen its relationships with financial institutions and fintech clients worldwide.

Jack Forestell, Visa’s chief product and strategy officer, expressed enthusiasm about the acquisition, stating, “Through the acquisition of Pismo, Visa can better serve our financial institution and fintech clients with more differentiated issuer solutions they can offer their customers.” The deal is expected to be finalized by the end of the year, pending regulatory approvals and customary closing conditions. Notably, Pismo’s current management team will remain intact and continue to operate from their São Paulo headquarters.

Pismo’s journey to this groundbreaking deal has been marked by remarkable growth. At the beginning of 2021, the company’s transaction volume stood at less than $1 billion per month, but it surged to nearly $40 billion in annual transaction volumes. With almost 80 million accounts and over 40 million issued cards, Pismo has cemented its position as a key player in the payments infrastructure space.

The acquisition garnered interest from multiple companies, with Visa emerging as the winning bidder. Ethan Choi, partner at venture firm Accel, which co-led Pismo’s Series B funding, emphasized the strategic significance of the deal and its potential synergies, asserting that Visa’s decision to provide core banking and card issuing services highlights the company’s commitment to working closely with banks and financial institutions.

Visa’s move to acquire Pismo echoes its previous infrastructure plays, such as the $2.15 billion acquisition of European fintech startup Tink, focused on open banking APIs. However, it is worth mentioning that Visa’s planned $5.3 billion acquisition of U.S.-based Plaid, an open banking startup, was abandoned due to regulatory hurdles.

The acquisition of Pismo by Visa not only serves as a major triumph for the Latin America region, which has experienced a surge in global investor interest, but it also signifies a remarkable turnaround for Pismo itself. In 2019, the startup faced financial hardship, having nearly depleted the cash it had raised in its initial seed round. Co-founders Binatti and Parise even resorted to selling their only car to sustain the company’s operations. Now, with the backing of Visa, Pismo’s workforce of over 400 employees will join the Visa team, further strengthening the company’s presence and capabilities.

This acquisition also highlights Accel’s knack for investing in financial infrastructure companies that subsequently attract significant attention and acquisition offers. In 2020, consumer financial services platform SoFi acquired payments and bank account infrastructure company Galileo for $1.2 billion, shortly after Accel injected $77 million in Series A funding into the company.

Visa’s acquisition of Pismo represents a pivotal moment in the fintech landscape, setting the stage for continued innovation and expansion in the payments and banking sectors. As the deal progresses, industry observers eagerly anticipate the impact of this strategic move and its implications for the future of banking and payments on a global scale.

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