The proposed deal by Nedbank to acquire a controlling stake in Kenya-based lender NCBA has moved a step closer.
Nedbank said on Monday the Kenyan Capital Markets Authority has granted an exemption from the requirement that the South African lender extend a mandatory takeover offer for 100% of NCBA shares in terms of the Capital Markets (Takeovers and Mergers) Regulations.
The granting of the exemption was one of the conditions of the proposed deal.
South Africa’s fourth-largest bank aims to spend almost R14bn for a controlling stake in Kenya-based NCBA, a lender Standard Bank is said to have been courting too.
Business Day reported in January that Nedbank, which relies on South Africa for 80% of its earnings, is looking to spread its wings to the fast-growing East Africa region after a disastrous investment in West Africa that ended in a costly withdrawal.
In January, Nedbank offered R13.9bn — more than 80% of its 2024 profit and over 10% of its JSE market capitalisation — for 66% of NCBA.
NCBA’s main shareholders include the Kenyatta family and that of the erstwhile governor of the Central Bank of Kenya, Philip Ndegwa. It has a 60-million-strong client base.
NCBA also operates in important economies in East Africa — Tanzania, Uganda, and Rwanda — and has a “digital offering in Ghana and Ivory Coast”.
Nedbank said on Monday it has secured further irrevocable undertakings, with NCBA shareholders holding about 77.54% of its shares having committed to accept the offer.
John Gachora, NCBA’s MD, said the merged group will anchor Kenya, East Africa’s largest economy, as a gateway to the rest of the region.
“Their [Nedbank’s] strong balance sheet will help us scale in our current markets as well as explore the investment proposition that the Democratic Republic of the Congo and Ethiopia have to offer,” he said.
Bloomberg reported in September last year that Standard Bank, which already derives more than 40% of its earnings outside South Africa, was also interested in buying NCBA.
Under Nedbank’s offer, NCBA will retain its listing on the Nairobi Securities Exchange, with 34% of its stake traded on the bourse.
Nedbank Group CEO Jason Quinn said at the time the offer was announced that it represents a milestone for the group’s strategy to grow its Southern and East African footprint.
Business Day
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.