Overview:
NCBA Group shareholders to receive cash and Nedbank shares in a proposed 66 percent stake acquisition by the South African banking group, pending regulatory approval.
NAIROBI, Kenya — Nedbank Group Limited has announced plans to acquire a 66% controlling stake in NCBA Group PLC through a tender offer that values the East African financial institution at 1.4 times its book value.
Under the proposed transaction, NCBA shareholders who participate in the offer will receive 20% of the payment in cash. The remaining 80% will be settled through the issuance of Nedbank ordinary shares listed on the Johannesburg Stock Exchange.
Following the acquisition, NCBA will become a subsidiary of Nedbank but will remain listed on the Nairobi Securities Exchange, with 34% of its shares continuing to trade publicly.
Nedbank, headquartered in South Africa, is one of the continent’s largest financial institutions. The company stated the move aligns with its strategy to expand beyond Southern Africa into high-growth markets in East Africa.
NCBA, which formed following a 2019 merger between NIC Group and Commercial Bank of Africa, operates 122 branches across Kenya, Uganda, Tanzania, Rwanda, Ivory Coast and Ghana. The group holds approximately 665 billion Kenyan shillings in assets and serves more than 60 million customers.
John Gachora, NCBA Group managing director, said Nedbank is an ideal partner for regional growth.
Their strong balance sheet will help us scale in our current markets as well as exploring the investment proposition that the DRC and Ethiopia have to offer, Gachora said.
Nedbank Chief Executive Jason Quinn said Kenya serves as a natural anchor for the bank’s ambitions in the region due to its sophisticated markets and dynamic technology sector.
Nedbank intends to preserve the NCBA brand, management team and operational model. Because Nedbank currently only operates a representative office in East Africa, the companies said no immediate integration of systems or operations will be required.
The deal is subject to regulatory approvals from central banks and other authorities. The transaction is expected to close within six to nine months.