Zenith Bank, Union Bank of Nigeria debunk proposed acquisition

Zenith Bank Plc and Union Bank of Nigeria plc have denied media report on the proposed merger or acquisition

A report on Friday has it that Zenith Bank had reportedly been given approval to merge or acquire with another listed bank on the Nigerian Stock Exchange (NSE), Union Bank of Nigeria.

The report by an online platform has it that both financial institutions are currently undergoing a merger or acquisition process and a tentative arrangement may have been reached to commence due diligence.

The Company Secretary, Union Bank of Nigeria, Somuyiwa Sonubi in a statement to NSE on Tuesday said, “The attention of Union Bank of Nigeria has been drawn to recent online speculation suggesting an agreement with Zenith bank to acquire Union Bank.

“Union Bank wishes to state that there is no such agreement and no binding offer has been made by anyone to either its shareholders or the board of Directors of Union Bank.”

On its part, Zenith bank in a statement also refuted the report, stating that has not made any binding offer to acquire any financial institution in the country.

The Company Secretary/General counsel, Zenith bank, Mr Michael Otu in a statement said, “we note certain recent internet and social media reports suggesting a proposed acquisition of Union Bank plc by Zenith Bank.

“We hereby state categorically that Zenith bank plc has not made any binding offer to acquire any financial institution.

Market stakeholder noted that the apex bank in days ahead might announce the possible merger or acquisition, stressing that banks not responding is to ease panic in the banking industry and the economy at large.

The National Coordinator, Progressive Shareholders Association of Nigeria, Mr Boniface Okezie urged the management of Zenith bank to conduct due diligence in merger or acquisition with Union Bank of Nigeria.

According to him, “The merger between both banks is a welcome development but the management of Zenith bank must conduct its due diligence before merging with Union Bank of Nigeria.

“The management of Zenith bank should understand the importance of Union bank of Nigeria stabilizing its books and make more progress.

“It is very unfortunate that the CBN caused the whole problem for Union Bank of Nigeria. After all the Sanusi Lamido Sanusi reforms, shareholders have not seen the impact on Union Bank of Nigeria.

Union Bank has become worst over the years. Union Bank has lost its identities, workers were sacked and shareholders who invested in Union Bank of Nigeria lost their investment.

“It is the fault of the regulators that we are witnessing merger or acquisition between five banks in the country today.”

Earlier in January, Union Bank of Nigeria sold its United Kingdom subsidiary to MBU Capital Limited. The London-based management investment firm acquired Union Bank UK after emerging as the most preferred bidder.

The CEO, Union Bank of Nigeria, Mr. Emeka Emuwa had said, “Consistent with our vision to be Nigeria’s ‘most reliable and trusted banking partner,’ we are optimizing our business model to focus solely on Nigeria where we continue to invest and thrive.

“Consequently, we have made the strategic decision to divest of our UK subsidiary, Union Bank UK which will enable us focus on the distinct long-term opportunities in the Nigerian market. The divestment is expected to conclude in 2020 subject to regulatory approvals in Nigeria and the UK.”

Union Bank of Nigeria recently raised N20 billion in series 3&4 commercial paper after successfully raising N24.3 billion through the issuance of the Series 1 and 2 of its N100 billion commercial paper programme.

Union Bank of Nigeria in its 2019 audited result and accounts for the period ended December 31, 2019, recorded a 33 per cent increase in profit before tax to N24.7billion in 2019 from N18.7billion reported in 2018.