CBZ, ZB Merger Faces Scrutiny

The competition watchdog, the Competitions and Tariff Competition (CTC), is conducting extensive  consultations in order to assess whether the proposed merger between leading  financial services institutions CBZ Holdings and ZB Financial Holdings  won’t undermine competition  while  simultaneously  bolstering its ultimate decision, Business Times can report.

This week, analysts  said the planned merger has the potential to  usher in  a behemoth in the financial services sector.

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This week, Business Times was informed by well-placed sources at CTC that the competition watchdog was carrying out comprehensive consultations in order to make a final decision.

They said this could be the biggest decision  that  CTC has to make in years.

“We are seized  with the matter  and we are reviewing the case [potential merger between CBZ and ZB] to make  the final decision. It’s  the biggest decision  that  CTC has to make in years, hence we don’t have to rush things but involve a lot of experts to come up with   a final decision.

“It’s a delicate matter as the potential merger  could not only change the financial services sector but the whole country’s business landscape,” a source close to the developments told Business Times this week.

It comes at a time  the two financial institutions are already  engaged in serious  negotiations  to form a market dominating behemoth. The proposed merger  might be the biggest Zimbabwe has ever seen.

Significant changes have already been made at CBZ, including the replacement of Marc Holtzman as chairman of the ZB board by Luxon Zembe, in an effort to hasten the combination of the two financial institutions.

At the end of this month, Mudavanhu, the Group CEO of CBZ Holdings, will also step down from his position. Since then, Lawrence Nyazema has been named CBZ Holdings’ acting CEO.

Zembe’s appointment to the dual position of chairman of the boards of ZB and CBZ is thought to have been made with the intention of accelerating the planned merger.

Experts said that the heavyweight would be more competitive in both domestic and international markets and that its strong financial position would draw in foreign investment to the nation.

Should the merger be successful, the group will have assets worth more than US$2.5 bn.

As a result of the merger, a substantial balance sheet will be created, allowing the behemoth to collaborate with other major players on the world stage and grow financial institutions. BusinessTimes