Acquisition of 100% Shareholding in International Commercial Bank by First Merchant Bank
On 24thApril, 2013, the Competition and Fair Trading Commission received an application for authorization of acquisition of 100% shareholding in International Commercial Bank Limited (ICB Malawi) by First Merchant Bank (FMB) through ICB Financial Group Holdings AG, a holding company based in Switzerland, whose business extends to banking services.
The transaction was part of the overarching transaction in which ICB Financial Group Holdings agreed to sell shares in its subsidiary companies present in Malawi, Zambia and Mozambique. At the time of the transaction, ICB Malawi did not meet the minimum regulatory capital and other liquidity requirements meant to safeguard customers.
Following consultations with relevant stakeholders in market and final assessment of the same by the Commission, it was found that the acquisition of ICB by FMB would protect depositors, who would have suffered if the company had liquidated due to capitalization problems.
Given number of players in the banking industry, it appeared to the Commission that the consolidation of banks would result in strengthening the industry for the benefit of the banking public. The transaction would, therefore, not substantially lessen competition in the banking industry in Malawi.
Therefore,the Commission authorised the acquisition of 100% shares of ICB Financial Group Holdings in ICB by First Merchant Bank.
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