Commercial Bank of Africa (CBA) and NIC Group have confirmed their merger plan whose completion will see the unified banks listed on the Nairobi Securities Exchange (NSE).
CBA shareholders will be issued with shares amounting to a 53 per cent stake in the merged institutions, effectively making the deal a reverse takeover of NIC.
NIC's existing shareholders will hold a 47 per cent equity in the combined operation.
The deal is currently valued at Ksh65 billion ($645 milion) - being the book value of the two institutions based on numbers published in the September quarter.
"Further to the cautionary announcement issued by NIC Group on December 6, 2018, the directors of NIC Group and, its wholly owned subsidiary, NIC Bank are pleased to announce that NIC Group and NIC Bank have agreed to enter into a merger with CBA," NIC said in a statement.
The deal values each NIC share at about Ksh43.3 ($0.43), representing a 48.7 premium to the bank's Wednesday's closing price of Ksh29.1 ($0.29).
It is, however, a discount of nearly 10 per cent to NIC's book value of Ksh48.1 ($0.48).