FPCNL and Access PFC Merger

This notification relates to the proposed acquisition by First Pension Custodian Nigeria Limited (FPCNL or the Purchaser), a subsidiary of First Bank of Nigeria Limited (FirstBank) of 100% of the issued share capital of Access Pension Fund Custodian Limited (Access PFC or the Target), a subsidiary of Access Bank Plc (Access Bank or the Seller) and a subsequent merger of both the Purchaser and the Target (the Proposed Transaction).

The Proposed Transaction entails: a) the acquisition by FPCNL of 100% of the issued share capital of the Target from Access Bank (the Proposed Acquisition); and b) subsequent to the Proposed Acquisition, merger of the Purchaser and the Target (the Merger), in line with extant regulations and consistent with the intention of the Parties to create a more robust business to serve stakeholders. The Purchaser and Target are both pension fund custodians (PFC) providing custody services to pension fund administrators in line with the Pension Reform Act, 2014.

The business is wholesale, business-to-business and the PFC customers, pension fund administrators (PFAs), are savvy and adequately informed. The industry regulation allows PFAs to easily move assets from one PFC to another, without restriction. Additionally, PFC fees are regulated by the National Pension Commission (PENCOM). Also, PFCs require prior clearance from PENCOM to receive fees charged. With price being set by regulation, customers decisions are influenced primarily by service delivery.

The proposed merger does not materially change the structure of the industry. The Target commenced operations in 2006 as the 4th PFC in Nigeria. It currently controls circa 3% market share, vs the next PFC with 25% market share. FPCNL is the 2nd largest PFC in Nigeria by Assets Under Custody (AUC). With this merger, FPCNL will retain its position as the second largest PFC with a market share of circa 35% vs the industry leader which has 41% market share. Rationale for the Proposed Transaction The Proposed Transaction arose as a result of the Sellers strategic intent to divest its interest from its pension fund custodian subsidiary.

The parties consider that the Proposed Transaction will enable FPCNL to expand the sphere of its operations and serve its business development purposes. The Merger would result in FPCNL increasing the scope of its business and clients in the pension custody space by about 3%. The Proposed Transaction represents a unique opportunity to create a more robust custodial entity and to contribute to the development of the pensions industry and the wider economy. The merger is expected to deliver cost synergies for the enlarged entity. This will provide FPCNL additional capacity to be able to make future investments to improve efficiency and effectiveness of service delivery.