Nedbank Group Ltd. has finalized its acquisition of a 66% controlling stake in NCBA Group Plc, marking a significant expansion into East Africa for the South African lender. The deal, valued at approximately $800 million or 13.9 billion rand, was based on a Nedbank issue price of 250 rand per share. As part of the agreement, NCBA will become a subsidiary of Nedbank but will remain listed on the Nairobi Securities Exchange.
The acquisition, which was priced at 105 shillings per share, represents a premium of about 17% to NCBA's trading price before the deal was announced in January. A total of 1,316,357,895 shares, or 79.9% of the issued capital, were tendered by the time the offer closed on July 10, exceeding the 66% stake Nedbank sought. As a result, excess acceptances were scaled back pro rata, with roughly 83% of tendered shares taken up.
The deal was structured such that 20% of the consideration will be paid in cash, while 80% will be in new Nedbank shares. Shareholders entitled to fewer than 200 Nedbank shares, roughly those holding under 9,400 NCBA shares, will receive cash only. The shares are set to change hands in a block trade on the Nairobi Securities Exchange on November 3, with settlement beginning on the same day.
NCBA will maintain its brand, local leadership, Nairobi headquarters, and customer-facing model, with products, branches, and digital channels remaining unchanged. According to NCBA Chief Executive Officer John Gachora, "The name is the same, the people are the same, but the ambition and capabilities are tremendously magnified." The acquisition was approved by various regulatory bodies, including the Central Bank of Kenya and the South African Reserve Bank's Prudential Authority.
The acquisition establishes a significant presence for Nedbank in East Africa and marks a decisive step forward in its African growth strategy. Nedbank CEO Jason Quinn noted that this landmark transaction will enhance the company's capabilities and ambition in the region. NCBA serves more than 60 million customers through 122 branches, operating in Kenya, Uganda, Tanzania, Rwanda, and Ivory Coast, with a digital lending business in Ghana.
Nedbank has physical operations across Southern Africa, including Namibia, Zimbabwe, Mozambique, Lesotho, and Eswatini. With this acquisition, Nedbank will leverage NCBA's existing infrastructure and customer base to expand its reach in East Africa. NCBA shares will be suspended from around the close of business on October 21 until the close on November 2 to facilitate the reconciliation of the share register.
The Capital Markets Authority of Kenya exempted Nedbank from a mandatory full offer on February 19, allowing the deal to proceed. With the acquisition complete, Nedbank will focus on integrating NCBA into its operations and exploring growth opportunities in the region. Key stakeholders, including regulators and shareholders, have given their approval for the deal, paving the way for Nedbank's expanded presence in East Africa.
Key points
- Nedbank acquires 66% stake in NCBA Group Plc for approximately $800 million.
- NCBA will maintain its brand, leadership, and operations, with Nedbank owning 66% of the company.
- The acquisition marks a significant step in Nedbank's African growth strategy, expanding its presence in East Africa.
