Nedbank Kenya: Completes NCBA Acquisition, Gains 66% Stake

• Nedbank Group completed the acquisition of a 66 percent stake in NCBA Group on November 3.
• The transaction involved a cash payment of Sh23.23 billion ($178.74 million) and the issuance of 43.63 million new Nedbank shares.
• 1.087 billion NCBA shares were transferred via an on-market block trade on the Nairobi Securities Exchange.
• NCBA Group is now a subsidiary of Nedbank, though 34 percent of its shares remain publicly listed on the NSE.
• The Capital Markets Authority approved the deal, which also led to new appointments to NCBA's board of directors.

This strategic move effectively brings NCBA Group under the control of the South African banking giant, marking a significant development in the East African financial landscape.

South Africa's Nedbank Group has successfully finalized its acquisition of a 66 percent stake in NCBA Group, a prominent Kenyan lender. The transaction, which concluded on November 3, involved a substantial cash consideration of Sh23.23 billion, equivalent to $178.74 million, paid directly to the accepting shareholders. This strategic move effectively brings NCBA Group under the control of the South African banking giant, marking a significant development in the East African financial landscape.

The acquisition was executed through the transfer of 1.087 billion NCBA shares via an on-market block trade conducted on the Nairobi Securities Exchange (NSE). In addition to the cash payment, Nedbank also issued 43.63 million new shares of its own stock as part of the overall consideration package for the deal. While NCBA shareholders initially tendered a larger volume of shares, totaling 1.316 billion and representing 79.9 percent of the lender's issued share capital, these applications were subsequently scaled down. This adjustment ensured that Nedbank acquired precisely the targeted 66 percent stake, with the remaining approximately 34 percent of NCBA's shares continuing to be held by the public.

This transaction represents a significant change of control in a major Kenyan bank. Lawyers advising financial institutions or involved in M&A should note the regulatory process, particularly the Capital Markets Authority's approval for such a large-scale acquisition via an on-market block trade. Compliance officers should be aware of the new governance structure and potential implications for cross-border regulatory compliance, given Nedbank's South African origin.

Source: Original reporting via Capital FM