South Africa’s Nedbank Group has launched an offer to acquire a 66% stake in Kenya’s NCBA Group in a cash-and-share transaction for 13.9 billion rand ($855.5 million), demonstrating the lender’s desire to extend its position in East Africa.
NCBA is one of East Africa’s biggest financial services organizations, and if allowed, it will become a subsidiary of its new South African parent company while maintaining its identity, local management team, and distinct stock market listing.
Under the proposed transaction, which is based on Nedbank’s share price of 250 rand, shareholders would get 20% in cash and the remaining 80% in freshly issued Nedbank ordinary shares listed on the Johannesburg Stock Exchange.
According to Reuters, the remaining 34% of NCBA’s shares will continue to trade on the Nairobi Securities Exchange.
Nedbank Chief Executive Officer Jason Quinn praised the deal as a key milestone in the bank’s strategy to expand its presence in southern and eastern Africa.
Nedbank emphasized East Africa’s strategic importance, citing solid macroeconomic fundamentals and the region’s position as a commerce corridor connecting Africa to the Middle East, India, and Asia.
NCBA, headquartered in Nairobi, was formed in 2019 by the merging of the NIC Group and the Commercial Bank of Africa. The company operates in Kenya, Uganda, Tanzania, and Rwanda, and provides digital banking services in Ghana and the Ivory Coast. It serves over 60 million clients from 122 branches.