Regulatory Delay Stalls CBZ Holdings’ Acquisition of First Mutual Holdings

The anticipated acquisition of First Mutual Holdings Limited (FMHL) by CBZ Holdings Limited (CBZHL) has hit a regulatory snag, leaving minority shareholders in limbo. This delay stems from the ongoing review process by the Competition and Tariff Commission (CTC) to ensure compliance with competition laws, following CBZHL’s acquisition of a controlling stake in FMHL from the National Social Security Authority (NSSA) in September 2023.

As per Zimbabwe Stock Exchange (ZSE) regulations, CBZHL is required to make a mandatory offer to purchase the shares of FMHL minority shareholders. However, this offer remains pending as the CTC has yet to finalize its assessment of the transaction. CBZHL has received a further extension from the ZSE, granting them until November 30, 2024, to publish the mandatory offer.

Rumbidzayi Angeline Jakanan, Group Chief Governance Officer at CBZHL, addressed shareholders in a notice, stating, “The CTC has communicated to the ZSE that it expects that its Board would have made the final decision on the transaction in terms of the Competition Act by the end of November 2024.”

This extension underscores the complexities of merging financial entities and ensuring compliance with regulatory frameworks. CBZHL has urged FMHL minority shareholders to exercise caution when trading their shares during this uncertain period.

Once the CTC completes its review and provides approval, CBZHL will be able to submit the mandatory offer to the ZSE for further review. Shareholders will be notified as soon as the offer is published, with additional guidance on the process to follow.

The acquisition, which promises to reshape the financial landscape in Zimbabwe, is seen as a strategic move for CBZHL, which operates across various sectors, including banking, insurance, and investments. However, the regulatory hurdles illustrate the careful scrutiny financial transactions undergo to maintain market integrity and protect shareholders’ interests.

As stakeholders await the outcome, the implications of this acquisition remain significant for both CBZHL and FMHL, potentially influencing the dynamics of Zimbabwe’s financial services sector in the months ahead.