Commodities Plunge Creates Acquisition Opportunity For Atlas Mara In Africa

Commodities Plunge Creates Acquisition Opportunity For Atlas Mara In Africa

Atlas Mara, an Africa-focused financial sector investment group, says it expects to get more investment opportunities on the continent as a year-long commodity price rout on global markets persists and the US dollar strengthen.

The rapidly growing sub-Saharan Africa financial service group, formed by former Barclays Chief Executive Robert Diamond and Dubai-based billionaire businessman Ashish Thakkar, has been on an aggressive investment plan in banks across the continent as it seeks to become a leading banking group in the region.

John Vitalo, Atlas Mara chief executive, told This Is Africa in an interview  on the sideline of a recently concluded  International Monetary Fund and World Bank meeting in Lima, Peru, that the current fall in commodity prices that has seen most African currencies fall against the dollar presented an investment opportunity for his group.

“This environment is actually good for us because we are looking for acquisitions to establish Atlas Mara footprints in Africa. In this environment there are few other people looking to do that and with dollars acquisition currency [we]  go further,” Vitalo said.

Dollar strengthening

Vitalo said a globally stronger dollar was going to work in their favour as the funds they have raised from various investors will go a long way when expanding their African banks portfolio.

“It really makes our dollar go further when we are looking for acquisitions and pricing an acquisition in a domestic African currency. That’s a good thing for us,” he said.

Are you interested in getting smart on Life Insurance?
No Doctor Visit Required, Get Policy for as low as $30 per Month
Click here to take the next step

“Other than that our business is run on local currencies under our local teams so the impact (lending risk) is really muted.”

Atlas Mara, which is already in seven sub-Saharan Africa countries including Rwanda, Nigeria, Botswana and Zimbabwe, targets about 14 countries in Africa where it wants to establish its footprint.

It acquired ABC Holdings and ADC African Development Corp last year and bought a stake in Union Bank of Nigeria Plc., and  now is seeking to buy as many as three more businesses in 2015, Diamond told Bloomberg TV.

The group is in talks to buy Zambia’s Finance Bank and  Mozambican lender Moza Banco SA, Bloomberg reported.

“Africa is open for business,” Diamond said. “They want investment. It’s fun, it’s a lot of hard work. But it’s really important that it’s open for business. Not many emerging economies with this potential allow foreign investment into banks and majority ownership.”

Thakkar, who was present during the interview with This Is Africa, said the underlying thesis that the group was built on was still in tack even with some commodity dependant economies on continent struggling.

“Atlas Mara has never had a short-term vision. we’ve always had a long term vision and our vision has been pretty bold from the beginning, which is we want to become Africa’s premier financial institution. Our fundamentals remain very solid so does out strategy,” Thakkar said.

“When you think about the macro across the continent there is still real growth taking place on the continent vs other markets and emerging markets. I think Africa’s fundamentals are still ripe and people who have long-term perspective as we do think it’s a huge opportunity.”