(NAIROBI, KENYA) – The Central Bank of Kenya has approved the acquisition of up to 66% of NCBA Group by South Africa’s Nedbank Group, clearing a key hurdle for the conclusion of the KES 110 billion (about $838 million / £659 million / €769 million) transaction.
Investors in the Nairobi Securities Exchange listed NCBA are set to receive KES 23.2 billion (about $177 million / £139 million / €162 million) in cash and take 46.63 million shares in Nedbank on conclusion of the deal. Nedbank has pledged to pay shareholders who accepted its offer within 14 trading days of the transaction receiving all regulatory approvals and satisfying all conditions.
“The CBK announces the acquisition of up to 66% of the shareholding of NCBA Group Plc by Nedbank Group Limited. This follows the approval by CBK on 28th August, under Section 13 (4) of the Banking Act,” the regulator said in a public notice.
The transaction is subject to multiple regulatory approvals given the regional operations of both NCBA and Nedbank. CBK’s approval follows that of other regulatory bodies such as the Capital Markets Authority, the Competition Authority of Kenya, the Tanzania Fair Competition Commission, the East African Community Competition Authority and the Comesa Competition and Consumer Commission.
NCBA has physical operations in Kenya, Uganda, Tanzania and Rwanda and digital presence in Ivory Coast and Ghana.
“The remaining regulatory approvals are progressing in accordance with their timelines and sequencing,” NCBA Group CEO John Gachora said in a press release.
“We remain committed to ensuring that the transition is managed responsibly and in the best interest of our customers, employees, shareholders and the broader financial sector,” Mr Gachora added.
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, associated with the families of founding President Jomo Kenyatta and former Central Bank of Kenya Governor Phillip Ndegwa, will become a Nedbank subsidiary while retaining its brand, management team and headquarters in Nairobi.