In a further update on its ongoing acquisition plans, CBZ Holdings Limited (CBZ), a Zimbabwean banking group, has announced it is confident regulatory approval for the merger with ZB Financial Holdings Limited (ZBFH) will be secured by the end of April 2024.
The transaction, if successful, will result in the creation of a financial services behemoth expected to dominate Zimbabwe’s financial and capital markets, according to CBZ chairperson, Luxon Zembe.
The latest update indicates that CBZ is nearing the final hurdle in its quest to acquire ZBFH.
This follows the acquisition of exchange control approval for the transaction, with only the Competition and Tariff Commission’s nod still outstanding. Completion of the merger is expected by the end of this year.
“…..the Directors of CBZ Holdings Limited (the “Company”), wish to advise all Shareholders and the investing public that the Company is still engaged in negotiations for a potential acquisition of a business in the financial sector.
“The Company has sought and is in the process of obtaining the requisite regulatory approvals to proceed with the acquisition which process, is at an advanced stage.
“The acquisition, if successfully concluded, may have a material impact on the value of the Company’s shares, the full impact of which is currently being determined,” read part of the cautionary statement issued by the company on Monday.
CBZ views the merger with ZBFH as a critical step in its plans to create a Zimbabwean financial services giant capable of supporting the country’s development aspirations as outlined in National Development Strategy (NDS1) and NDS2.
The merged entity is envisioned to play a key role in mobilising resources and driving economic growth.
CBZ is also pursuing a merger with leading insurance services provider First Mutual Holdings Limited (FMHL) as part of its grand scheme to establish a dominant financial services group. Negotiations for the FMHL merger are also at an advanced stage.
If successful, the mergers will see the creation of a financial services powerhouse with a strong presence across banking, insurance and property sectors.
Two weeks ago, CBZ announced a delay in publishing its financial statements for 2023 due to complications with its stake in FMHL.
The company cited three main reasons for the delay. The group said the accounting for FMHL as an associate required including a portion of FMHL’s reserves in CBZ’s financials.
CBZ also noted an unresolved dispute between FMHL’s subsidiary, First Mutual Life Assurance Company (FML), and the Insurance and Pensions Commission (IPEC) as hindrance to finalisation.
Lastly, the recent adoption of a new accounting standard for insurance contracts has caused delays in restating CBZ’s financials for 2021 and 2022.
The dispute between FML and IPEC stems from a “Corrective Order” demanding substantial payments to policyholders based on an audit. FML disagrees with the order and is challenging it in court.
Accordingly, the High Court’s ruling and the ongoing negotiations will be crucial in determining the future of FML.
