Moody’s seeks expansion into Africa with majority stake in GCR Ratings
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Aims to strengthen Africa’s financial markets
Moody’s Corporation, a global risk assessment firm, says it will acquire a 51 percent majority stake in Global Credit Rating Company Limited (GCR), one of Africa’s leading credit rating agencies.
The development, according to Rob Fauber, Moody’s president and chief executive officer, presents a unique opportunity to expand Moody’s presence in a high-growth region, leveraging GCR’s successful operations spanning the African continent, including in South Africa, Nigeria, Senegal, Kenya, and Mauritius.
“GCR’s ratings play a significant role in the growth of Africa’s financial markets by providing critical insights into credit across a range of economies and sectors,” Fauber added.
Though the terms of the transaction were not disclosed and is subject to customary regulatory approvals, Moody’s said it will be funded with cash on hand, and it is expected to close in Q2 2022 and will not have a material impact on Moody’s 2022 financial results.
Following the transaction, GCR will continue to develop its own rating methodologies, issue its own credit ratings, and maintain a separate management team.
Commenting on the transaction, Marc Joffe, chief executive officer of GCR, said it is an important milestone in the history of the company.
He added that the transaction will enable CGR to build on its deep local market insights and a quarter-century of growth across the continent, and also provide the opportunity to further develop solutions that meet a range of customer needs, including credit ratings, credit risk solutions, and ESG capabilities.
In addition, Moody’s and GCR said they are set to playing a positive societal role across the continent. Both companies also expressed commitment to advance corporate social responsibility initiatives, including social enterprises that provide education and support to female-owned businesses and entrepreneurs in South Africa.
To this end, Moody’s has begun engaging with a South Africa-based empowerment partner who will provide local strategic support through substantial equity participation and representation on the GCR South Africa board.
“Moody’s is committed to economic transformation in South Africa and sees empowerment as an important part of the future success of its investment in GCR,” the company stated.