Barclays, Absa ink deal to merge Africa operations
Posted Monday, December 10 2012 at 02:00
Controlling stake. The merger gives Absa a controlling stake in majority of Barclays Bank Africa operations.
Absa Group, South Africa’s largest commercial bank has inked a deal to takeover Barclays Bank Africa operations with a view of growing the group’s business on the continent.
Barclays, which owns majority stake in Absa will raise its stake in the South African third-largest bank to 62.3 per cent from 55.5 per cent as part of a deal first outlined in August this year.
The proposed transaction will see Absa acquire a portfolio of most of Barclays’ Africa for a consideration of 129,540,636 ordinary shares, representing a value of Shs1.6 trillion.
The deal will also see Absa acquire a 100 per cent stake in Barclays Bank Uganda, rated the third largest bank in the country with an asset portfolio in the excess of Shs1.16 trillion.
Barclays Bank opened its operations in Uganda in 1927, operating two branches in the capital - Kampala and one in Jinja.
However, the bank has over the years grown its branch network boosted by new extensions and the takeover of Nile Bank in 2007.
The Absa chief executive officer Ms Maria Ramos, said the group was seeking to explore growth opportunities on the continent through a combined delivery of services.
She said the move is a compelling and unique opportunity to further the ‘One Bank in Africa’ ambitions by combining with a leading sub-Saharan African banking franchise.
This she added will accelerate plans to expand corporate banking, market activities and bank assurance in Africa.
In the past, Absa had been barred from expanding into Africa as its parent company, Barclays, was already operating in the region, causing it to lose out on lucrative markets to bigger rivals.
Absa Group will be renamed ‘Barclays Africa Group Limited’ to reflect the enlarged portfolio and pan- African focus of the business but the Absa brand will continue to be used for the retail bank and card businesses in South Africa once the transaction is complete.
The portfolio that will be acquired by Absa will include ownership interests in banking operations in Botswana (67.8 per cent), Ghana (100 per cent), Kenya (68.5 per cent), Mauritius (100 per cent), Seychelles (99.8 per cent), Tanzania (100 per cent), and Zambia (100 per cent), as well as the Barclays Africa regional office in Johannesburg (100 per cent).
Absa will continue to own 100 per cent of Absa Bank Limited, 95.8 per cent of Barclays Bank of Mozambique and 55 per cent of the National Bank of Commerce in Tanzania.
However, the bank’s operations in Egypt and Zimbabwe will not form part of the transaction.
Mr Antony Jenkins, the Barclays’ chief executive officer said the partnership that will be finalised in the first half of 2013 is expected to give the bank a platform from which they can further grow their Africa business to the benefit customers.