Union Bank of Nigeria has sold its United Kingdom subsidiary, Union Bank UK (UBUK), to London-based investment manager MBU Capital, subject to regulatory approval in Nigeria and the UK.
Lagos-headquartered Union Bank, listed on the Nigerian Stock Exchange, said the sale of its 100% stake was part of a move “to geographically streamline its business operations to focus on growth opportunities in Nigeria”.
Union Bank established its presence in the UK in 1983, establishing UBUK as a separate entity in 2004.
MBU, meanwhile, said UBUK would focus on the small and medium-sized enterprise (SME) market.
Union Bank chief executive Emeka Emuwa explained the deal in a statement: “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.”
He continued: “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.
“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.”
MBU founder and chief executive Mohammed Iqbal added: “We see a huge opportunity to build on UBUK’s strengths in international markets to create a new-style bank which is focused on the needs of UK and international SMEs and entrepreneurs.”
Founded in 2013, MBU has a range of direct investments in the education, natural resources and healthcare sectors, and is active in the venture capital and investment advisory fields.
It received financial advice on the deal from London-based Syndeo Capital and its co-founder and managing partner Mandeep Ahluwalia, with further financial and tax advice from PwC.
Legal advice came from Washington, DC-headquartered Akin Gump Strauss Hauer & Feld, whose team was led by London corporate partner Gavin Weir and included associate Alla Barford, partners Helen Marshall and Ezra Zahabi in the financial regulatory practice, and partner Stuart Sinclair and associate Mohammed Natha in the tax practice.
Weir described it as “an interesting deal”, continuing: “The UK banking sector promises to be a fertile ground for M&A, with private equity and investment funds showing a healthy appetite for speciality finance, trade finance and innovative banking products.”
Union Bank was advised by Nigerian investment bank and investment manager Chapel Hill Denham, with legal advice in London from the United States firm White & Case and in Nigeria from Udo Udoma & Belo-Osagie.
