Nedbank’s R14bn takeover of Kenya’s NCBA becomes unconditional

Nedbank’s deal to take control of Kenya’s NCBA has become unconditional, clearing the way for the South African bank’s push into East Africa.

The deal is a big bet on the region’s growth prospects as Nedbank seeks to reduce its reliance on its home market.

In a statement on Monday, Nedbank said the R13.9bn transaction, under which it will acquire about 66% of NCBA, had become unconditional on October 15. This comes about seven weeks after the deal received approval from the Central Bank of Kenya.

The bank had already secured acceptances from NCBA shareholders holding about 77.54% of the Kenyan lender.

The transaction is expected to close on or about November 3, when NCBA shares will be transferred to Nedbank, and accepting shareholders will receive their cash and newly issued Nedbank shares.

Nedbank said it would announce the final figures for the cash paid and shares issued on November 5 and expects to consolidate NCBA’s results in the fourth quarter.

The deal gives Nedbank exposure to NCBA’s operations in Kenya, Tanzania, Uganda and Rwanda, as well as its digital operations in Ghana and Ivory Coast. Kenya, the region’s largest economy, is expected to serve as the centre of Nedbank’s broader East African expansion.

South Africa’s big banks are increasingly looking beyond the domestic market for growth. Nedbank remains more heavily exposed to South Africa than some of its peers, making the expansion an important part of its efforts to diversify its earnings base.

NCBA will retain its listing on the Nairobi Securities Exchange.

Additional reporting by Noxolo Majavu

Business Day