By Radarr Africa Business Desk
October 26 (Radarr Africa) – South Africa’s Nedbank Group has completed its acquisition of about 66 per cent of Kenya’s NCBA Group Plc, making NCBA a Nedbank subsidiary, according to Ecofin Agency, The Exchange Africa and the Kenya Broadcasting Corporation (KBC).
Ecofin Agency reported that the two lenders announced on Monday, October 19, that all required regulatory approvals had been received. The offer closed on July 10, by which time NCBA shareholders had tendered 1,316,357,895 shares, or 79.90 per cent of issued share capital. Because that exceeded Nedbank’s target, excess applications were scaled back proportionally to reach roughly 66 per cent.
KBC reported that the offer became unconditional after shareholders accepted the sale of 1,087,362,891 ordinary shares, valued at an estimated KSh110 billion. The remaining 34 per cent stays in public hands, and NCBA keeps its listing on the Nairobi Securities Exchange (NSE).
Ecofin Agency set out the terms. For every 100 NCBA shares tendered, holders receive KSh2,100 in cash, about $16.17, and 4.02994 Nedbank ordinary shares. Holders of fewer than 200 Nedbank shares, and those barred from holding foreign-listed securities, receive cash only. Share transfers and payments are scheduled to begin on November 3.
KBC said NCBA shares are suspended on the NSE from October 21 and resume trading on November 2, to allow the share register to be reconciled.
Jason Quinn, Nedbank’s chief executive, said: “This landmark transaction establishes a significant presence for Nedbank in East Africa.” KBC said he presented the deal as a step in Nedbank’s African growth strategy that links Southern and East African banking platforms.
John Gachora, NCBA’s managing director, said: “We are now poised to boldly go after opportunities across the East African region.” He said the deal would help NCBA expand its footprint and offer more sophisticated products, KBC reported.
Ecofin Agency said Quinn indicated that NCBA will keep its local identity and leadership while gaining Nedbank’s resources and investment capacity. The Exchange Africa reported that NCBA will retain its brand, Nairobi headquarters and local leadership, and that products, branches and digital channels will remain unchanged for customers.
NCBA says it has 60 million customers and 122 branches across six markets: Kenya, Uganda, Tanzania, Rwanda, Cote d’Ivoire and Ghana, KBC reported. Ecofin Agency noted that NCBA has banking subsidiaries in Kenya, Uganda, Tanzania and Rwanda, while its Cote d’Ivoire and Ghana activities are digital banking services. It said Nedbank will therefore not hold physical bank subsidiaries in all six markets.
Nedbank, which Ecofin Agency said serves more than 8 million customers and is listed on the Johannesburg Stock Exchange and the Namibian Stock Exchange, previously operated in South Africa, Namibia, Zimbabwe, Mozambique, Lesotho and Eswatini. It also had a Kenyan representative office that offered no banking services. Outside Africa, it operates in the Isle of Man and Jersey and offers international banking from London and Dubai.
Ecofin Agency said the deal was finalised nine months after Nedbank first proposed the takeover. NCBA was formed in 2019 through the merger of NIC Group and Commercial Bank of Africa.
The Exchange Africa named Equity, KCB, Co-operative Bank and Absa as NCBA’s main competitors in Kenya. It also pointed to currency exposure, noting that volatility in the Kenyan shilling against Nedbank’s rand-based reporting is a risk the group will have to manage.
Ecofin Agency noted that its report did not explain why regulatory approvals were announced in October when the offer had closed on July 10.
