(Ecofin Agency) - The transaction's financial terms have not been disclosed, but the combined balance sheet of the involved activities amounted to CFA376 billion at the end of 2023. This move would strengthen Benin's dominant position in the country's banking sector.

The Republic of Benin has signed an agreement to acquire all shares directly and indirectly held by French banking group Société Générale in its local subsidiary. This agreement, expected to be finalized in 2025, also includes the acquisition of the Togolese branch. "According to the commitments made, the Beninese state would take over all activities operated by this subsidiary, as well as the entire client portfolio," the group explained in a statement.

Although the financial conditions of the transaction were not revealed, data from the West African Economic and Monetary Union (WAEMU) Banking Commission shows that the combined balance sheet of the Beninese subsidiary and the Togolese branch involved in the acquisition project totaled CFA376 billion at the end of 2023. It is noteworthy that neither institution is a leading financial entity in the banking landscapes of their respective countries.

For Société Générale, completing this operation aligns with its strategy of withdrawing from non-strategic markets that strain its equity, in line with new banking regulation standards.

The Beninese government has yet to officially comment on its motivations for this acquisition. However, it is known that the state is a significant investor in Benin's banking sector, holding 25.9% of shares at the end of 2023, ahead of the private national capital.

In 2023, Société Générale Benin ranked 73rd out of 133 banks in the WAEMU zone in terms of total assets. A vigorous lending activity propelled it to the 55th position in the sub-region. Benin will need to obtain approvals from the Banking Commission and Togo's monetary authorities.

Besides the transaction price, other details of the sale agreement have not been disclosed, such as the management of banking correspondence for the new entity and other aspects of the banking operations.