South Africa's Nedbank Group Limited has moved to take control of NCBA Group PLC, offering to acquire about 66% of Kenya’s third-most-valuable listed lender in a transaction that would rank among the largest cross-border banking deals in East Africa in recent years.
- •The South African financial services giant said it has secured binding commitments covering 71.2% of NCBA’s issued shares, materially reducing execution risk as the deal enters regulatory review.
- •The structure would leave the remaining 34% of the bank trading on the Nairobi Securities Exchange, even as Nedbank gains effective control and NCBA becomes a subsidiary of the group.
- •The group, which is listed in Johannesburg and Namibia, reported trailing twelve-month revenue of about ZAR 69 billion and net income attributable to shareholders of roughly ZAR 16 billion, according to public disclosures.
In a notice issued on January 21, Nedbank said it plans to acquire roughly 1.09 billion NCBA shares through a partial pro-rata tender offer. NCBA’s largest shareholders collectively control about 72% of the register, underscoring the concentration of ownership behind the commitments.
The Deal
The proposed transaction values NCBA at about 1.4x book value and is structured as a combination of shares and cash. For every 100 NCBA shares tendered, shareholders would receive 4.02994 newly issued Nedbank shares, representing 80% of the consideration, and a cash payment of KSh 2,100, accounting for the remaining 20%. Nedbank shares will be issued at ZAR 250 each, using a fixed KES/ZAR exchange rate of 7.7143.
Where shareholders are unable to hold offshore-listed shares, or where fractional entitlements apply, the offer document deems the consideration at KSh 10,500 per 100 NCBA shares, payable fully in cash. Nedbank said fractional entitlements to its shares will be rounded down in line with Johannesburg Stock Exchange rules, with any residual value settled in cash.
NCBA confirmed receipt of the strategic investment proposal, saying the transaction would position the lender as Nedbank’s primary platform for East Africa. NCBA operates across Kenya, Uganda, Tanzania, Rwanda, Ivory Coast and Ghana, with 122 branches serving more than 60 million customers. The group reported assets of about KSh 665 billion and said it disburses more than KSh 1 trillion in digital loans annually, with an average return on equity of roughly 19% since 2021.
What Next?
Nedbank said it has obtained irrevocable undertakings from shareholders representing 71.2% of NCBA’s issued shares to accept the offer in respect of their pro-rata entitlements, with the option to apply for excess shares subject to allocation mechanics. The identities of the shareholders who provided the undertakings were not disclosed.
Completion of the transaction is subject to approvals from multiple regulators, including the Capital Markets Authority and the Central Bank of Kenya, as well as competition authorities in Kenya and other relevant jurisdictions. Nedbank said it will apply for an exemption from Kenya’s mandatory takeover rules to allow it to acquire a controlling stake without making a full offer for the remaining shares.
If the exemption is not granted by the stipulated deadline, the structure provides for an alternative offer mechanism designed to ensure Nedbank’s resulting shareholding does not exceed its 66% target by more than a narrow margin, the bank said.
For Nedbank, the acquisition represents a significant expansion beyond its core Southern African markets. The offer’s heavy reliance on equity consideration limits pressure on Nedbank’s cash position and regulatory capital ratios.
Subject to regulatory approvals, Nedbank expects the transaction to close within six to nine months. If completed, the deal would reshape the ownership of one of Kenya’s most systemically important banks while preserving public market participation through the Nairobi bourse.
