Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
Nedbank’s buyout of NCBA gets regional approvals
Customers perform transactions on Nedbank automated teller machine (ATM) at the Trade Route Mall in Lenasia outside Johannesburg, South Africa on February 8, 2023.
The proposed acquisition of a 66 percent shareholding in NCBA Group by South Africa’s Nedbank Group has secured unconditional approval from two key regional competition regulators, moving the cross-border banking deal a step closer to completion.
The Common Market for Eastern and Southern Africa Competition Commission (CCCC) and the East African Community Competition Authority (EACCA), have both approved the proposed transaction.
In its decision, the CCCC said the transaction was unlikely to negatively affect competition in the three Comesa markets where NCBA operates, paving the way for an unconditional clearance.
“The merger was not likely to substantially prevent competition in the Common Market or a substantial part of it, nor would it affect public interest,” the regulator said in its ruling.
EACCA is yet to publish its decision, but Nedbank disclosed in an investor update on Tuesday that it had already received the authority’s approval.
Within the 21-member Common Market for Eastern and Southern Africa (Comesa), NCBA operates in Kenya, Rwanda and Uganda, while Nedbank has operations in the Democratic Republic of Congo, Egypt, Eswatini, Kenya (a representative office), Mauritius, Rwanda, Seychelles, Tunisia, Uganda, Zambia and Zimbabwe.
Both lenders also have operations outside the common market. NCBA is present in Tanzania, Côte d'Ivoire and Ghana, while Nedbank operates in South Africa, Lesotho, the Isle of Man and the United Arab Emirates.
The latest approvals add to earlier clearances from the Prudential Authority of the South African Reserve Bank, leaving only a handful of regulatory conditions outstanding before the transaction can close.
“The balance of approvals are tracking well...The indicative completion date of the transaction (subject to regulatory approvals) remains at the end of third quarter 2026 or early fourth quarter 2026,” Nedbank said in its investor update.
Nedbank announced the proposed acquisition in January, offering about Sh110 billion in cash and stock for a controlling 66 percent stake, making it one of the largest cross-border banking acquisitions in East Africa in recent years.
The consideration comprises 20 percent cash and 80 percent Nedbank shares, with NCBA set to remain listed on the Nairobi Securities Exchange after completion.
The South African lender is seeking to deepen its presence in East Africa, which it considers a strategic growth market due to its expanding population, rising financial inclusion and increasing trade links with the Middle East and Asia. Upon completion, NCBA will become a Nedbank subsidiary while retaining its brand, management team and headquarters in Nairobi.
Nedbank has already secured irrevocable undertakings from shareholders representing 77.54 percent of NCBA’s issued shares, guaranteeing it a controlling stake of at least 51.17 percent in the Kenyan banking multinational.
At the close of the deal, the families of founding President Jomo Kenyatta and former Central Bank of Kenya Governor Phillip Ndegwa will receive a cash payout of up to Sh1.32 billion, and more than Sh20 billion worth of Nedbank shares.
