Moody’s Corporation (NYSE: MCO) announced on Wednesday that it has agreed to acquire a majority (51 percent) stake in Global Credit Rating Company Limited (GCR), a leading credit rating agency in Africa with operations covering 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,” said Rob Fauber, President & Chief Executive Officer of Moody’s.
“By combining GCR’s successful domestic operations with Moody’s global expertise, we have a unique opportunity to expand Moody’s presence in a high-growth region.”
Marc Joffe, Chief Executive Officer of GCR described the move as an important milestone in the history of the credit rating agency.
“This transaction will enable us to build on our deep local market insights and a quarter-century of growth across the continent. It will also provide the opportunity to further develop solutions that meet a range of customer needs, including credit ratings, credit risk solutions, and ESG capabilities” he said.
Moody’s said it is committed to economic transformation in South Africa and sees empowerment as an important part of the future success of its investment in GCR.
To this end, Moody’s said it is 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 and GCR are also committed to playing a positive societal role, according to a statement.
In South Africa, Moody’s and GCR intend to advance corporate social responsibility initiatives, including social enterprises that provide education and support to female-owned businesses and entrepreneurs.
GCR said following the transaction, it will continue to develop its own rating methodologies, issue its own credit ratings, and maintain a separate management team.
The transaction is subject to customary regulatory approvals and although its terms were not disclosed, it will be funded with cash on hand.
The transaction is expected to close in Q2 2022 and will not have a material impact on Moody’s 2022 financial results.
WN/as/APA