How TGI acquired and funded Union bank

You may have heard things like, “na the papa wey born my mama brother born am”. We say this in Nigeria a lot when we find it hard to say simply “he is my cousin.” Union Bank has been facing almost the same dilemma recently. In 2022, we were told by various news media that the bank was acquired by Titan Bank, a privately owned bank acquiring a publicly listed entity! Well, in this article, we will discuss how TGI acquired and funded Union Bank.

Just as in the dilemma, a recent development we are made to know that Union Bank was acquired by TGI group (Tropical General Investment) and that the conglomerate is also the owner of Titan. Therefore, Titan is now the elder brother to Union Bank (a former Big Brother bank with more than 45 years of existence in Nigeria). 

A Naked Truth of Titan Bank

First, we know that Titan Bank acquired Union Bank. But allows Union Bank to run separately instead of a complete absorption. This was seriously absurd in the first instance. What I was expecting was a change of name of Union Bank as Access Bank acquired Diamond Bank. But this didn't happen! Little do we know that the actual buyer was TGI. Thanks to the investigation report on the matter with regards to the central bank of Nigeria and its former governor of the bank Godwin Emefiele. Now we know why there wasn't a change of name for Union Bank. TGI now has two banks as part of its ambition to be an international conglomerate. 

Who is TGI?

According to the newsletter by Union Bank over the weekend, it was clear that TGI (Tropical General Investment) is a conglomerate company with several investments in Nigeria, India, United Arab Emirates, Morocco, and Germany. They have invested in various areas of the Nigerian economy, especially in agriculture and agrochemicals. They were the former owners of Chi Limited, a company that produced Chivita before it was sold to Coca-Cola as a result of its planned purchase of Union Bank.

TGI has contracts with the Lagos and Edo state governments. This includes the building of 32 metric tonnes of Imota Rice mill in Lagos. And a factory that produces NPK fertilizer in Edo state. The company was boosted by paying 50 billion in annual taxes to the Nigerian government. In addition, it has food and agricultural production businesses in Lagos and Ogun states. And Rice mills in the northern part of Nigeria. 

How TGI funds the acquisition of Union bank

The Union Bank and TGI agreement took more than a year to accomplish. Unlike what people may think, it was also transparent. They also employ the services of top finance intermediaries to carry out the merger and acquisition process. This includes Citibank and Rothschild. Through Titan Bank, TGI paid a total sum of 500 million US Dollars for the acquisition. It claims that the fund includes a 300 million US dollar loan sourced from the Africa Export-Import Bank (Afrexim) and the rest from the sale of its Chi limited business to Coca-Cola company. Wait! Does it mean that Chi Limited was sold for USD 200 million?