FMDQ Group has reached an agreement to acquire about 21.6% stake in Central Securities Clearing System (CSCS) Plc, Nigeria’s Central Securities Depository (CSD). The value of the transaction is however still under wraps.
The deal is subject to the approval of the Security and Exchange Commission (SEC), and the Federal Competition and Consumer Protection Commission (FCCPC).
Sources with knowledge of the transaction say the FMDQ Group will buy out shares owned by Leadway Insurance and from Artemis Ltd., a vehicle owned by Verod Capital. The two entities own 16.6% and 5%, respectively, delivering a combined 21.6% ownership of the CSCS.
The transaction is being viewed positively by regulators, as it is expected to deepen capital market operations and enhance competition amongst exchanges, with both outcomes viewed as good for consumers and businesses.
This will also rub off on the companies’ shareholders and the capital market considering the experience and pedigree of FMDQ.
Shares of CSCS currently trade on the NASDOTC and have gained over 183% in the last year and could surge as is typical with deals like this.
The transaction is being viewed positively by regulators, as it is expected to deepen capital market operations and enhance competition amongst exchanges, with both outcomes viewed as good for consumers and businesses.
FMDQ’s acquisition of major shares in CSCS provides the latter with a strong shareholder with enough experience, capacity, and capital to help drive growth in an increasingly changing capital market that requires significant investment in technology and manpower.
FMDQ is a leading African financial market infrastructure group with ownership in a host of companies offering services that are vertically integrated into the financial market system.
CSCS is licensed to carry on the depository, clearing, and settlement of all transactions in the Nigerian Capital Market.
CSCS currently has six shareholders with over 5% ownership, according to its December 2020 annual report, which include the Nigerian Exchange Group (29.19%); Access Bank (7.5%); UBA (5.37%); Artemis Ltd. (16.6%); Ess-Ay Investments Ltd. (10%); and Leadway Insurance (5%).
