CBZ-ZB merger is a rumour: Vingirai
TRANSNATIONAL Holdings Limited (Transnational), one of ZB Financial Holdings (ZBFH)'S major shareholders, claims to have been kept in the dark over the looming ZBFH-CBZ Holdings (CBZH) merger, businessdigest has learnt.
According to a swap deal transaction that took place in 2022, CBZH became the largest shareholder of ZBFH when the National Social Security Authority (Nssa) gave up its 37,79% stake in exchange for CBZH shares valued at ZW$640 million (US$7,8 million).
Transnational accepted 33% shareholding in ZBFH for part of its Intermarket Holdings Limited (Intermarket) assets. In addition, Transnational holds 14,61% shareholding directly in Intermarket.
At a time CBZH is close to buying a controlling stake in ZBFH as it aims for the financial services behemoth to attract foreign investment to support national development projects, the merger will require shareholder approval.
Transnational chief executive officer Nicholas Vingirai told businessdigest in an exclusive interview that he had not been notified about the ongoing negotiations with CBZH.
"Transnational Holdings Limited is not privy to CBZ Holdings Limited's strategy and plans, or its intentions to merge with ZB Financial Holdings Limited,” he said.
“Further, Transnational, as a major shareholder of ZBFH, has no formal notification from ZBFH of any merger negotiations with CBZ. The CBZ-ZBFH "merger story" remains a rumour that Transnational has heard through the media. As a matter of policy, Transnational does not comment on rumours.”
However, CBZH chairperson Luxon Zembe recently confirmed the merger through the State media, saying ZBFH presented the most attractive prospects for the merger, as the country’s secondbest capitalised banking group after CBZ.
"But when you then superimpose that on our national economy and say do we have strong financial institutions that we can anchor our national strategy in, that can drive our economic development, that can support industry in a very robust, aggressive manner, we do not have such financial institutions,” he was quoted as saying.
“It’s like a small guy trying to lift a boulder; they cannot, you need someone with appropriate muscle to lift the boulder.
“This is why the merger among CBZ Holdings, ZBFH and First Mutual Holdings Limited is a very important strategic move at a national level to be able to anchor national economic development and support businesses,” Zembe said.
This is also coming at a time when there is another pending deal to merge ZB Financial Holdings’ two banking units, ZB Bank Limited, ZB Building Society and Intermarket Banking Corporation.
This was supposed to have been completed by December 31, 2021 but it is still hanging.
Vingirai, however, confirmed that the teething issues have been resolved, but the merger will only be complete once rationalisation of these shareholding positions is completed.
"We can confirm that, as has been reported in ZBFH'S published annual statements, Transnational accepted 33% shareholding in ZBFH for part of its Intermarket assets, and that in addition, Transnational holds +/- 14,61% shareholding directly in Intermarket Holdings Limited,” he said.
“Clearly, the Intermarket-zbfh merger will only be complete once rationalisation of these shareholding positions is completed.”
Transnational's shareholding of 33% in ZBFH and 14,61% in Intermarket resulted from a 2015 government-brokered settlement of the 2007 disputed acquisition of Intermarket by ZBFH.
"Strictly speaking, therefore, there should be no dispute to talk about anymore. However, the implementation of the government-brokered 2015/16 settlement agreement has remained inordinately and incomprehensibly elusive,” Vingirai said.