NIGERIA'S STERLING Bank has signed a transaction implementation agreement (TIA) with Equitorial Trust Bank (ETB) to acquire the financial institution.

Sources say the deal, which was struck on Thursday, makes Sterling Bank the fifth to reach an advanced stage in recent weeks among the rescued banks, after FinBank, Intercontinental Bank, Oceanic Bank and Union Bank signed similar agreements with potential buyers and has already won the backing of the ETB board and Chief Mike Adenuga, the billionaire founder of the bank.

Reports also indicate that the Asset Management Company of Nigeria (AMCON) and the Central Bank of Nigeria (CBN) were privy to the negotiations.

Sterling Bank, until recently, was considered an attractive front-row partner for foreign financial institutions looking to leapfrog an entry into Africa's fastest

growing financial services market.

The latest announcement would mark an end to speculations on the bank's varied strategic growth options as it finally opts for domestic consoldation over foreign dominance. Since the CBN's intervention, the future of ETB, long considered unique because of its binding relationships with businesses linked to its major shareholder in the mobile telephony, real estate and telecoms sectors, has been less obvious.

While a few other rescued banks had significant majority shareholders, none had such a close dependence on trading entities connected to a single shareholder for customer volume. This has made the ETB founder's buy-in to any deal vital for potential acquirers.

According to an informed source close to the talks, 'the Sterling Bank-ETB talks are being driven by clear strategic considerations on the post-deal benefits for both sides, in contrast to what we have seen in some other discussions, where one party in negotiations seems to have been the involuntary acquiescent partner.
Relevant Links

The urgency introduced by the NDIC's takeover of three institutions aside, this is a very well thought out deal that would yield impressive returns on equity for years to come.' While the financial terms of the deal, described by analysts as the stealth deal of the year are yet to be disclosed, it is expected that the TIA will move to a substantive agreement without the distractions of litigations filed by minority shareholder.

ETB is privately held and is not listed on the Nigerian Stock Exchange. For Sterling Bank's shareholders, it is widely expected that they would welcome the deal as a historic opportunity to substantially scale up its assets and operations, in addition to benefitting from the cost savings to be derived from the merger's synergies.

An institutional shareholder who spoke on the condition of anonymity said, 'Naturally, we are surprised at the news, and pleasantly too. ETB enjoys excellent custom from key players in telecoms and petroleum marketing, and they are bringing this to the table, which is goods.