NCBA Group PLC has announced it has received a Strategic Investment Proposal and a Notice of Intention from South Africa’s Nedbank Group Limited to acquire about 66 per cent of its shares through a Nedbank Tender Offer, a transaction that could see NCBA become a subsidiary of Nedbank while keeping part of its shares listed on the Nairobi Securities Exchange (NSE).
Nedbank Tender Offer Values NCBA at 1.4 Times Book Value
NCBA Group PLC (NCBA) said the Nedbank Tender Offer will involve Nedbank acquiring approximately 66 per cent of the ordinary shares of NCBA from shareholders.
If the Nedbank Tender Offer is successfully completed, Nedbank will gain a controlling interest in NCBA, making the bank a subsidiary of Nedbank. NCBA noted that once the Nedbank Tender Offer closes, the remaining 34 per cent of NCBA shares will stay listed on the NSE.
Under the planned acquisition, NCBA is valued at a multiple of 1.4 times its book value. Shareholders who take up the Nedbank Tender Offer will receive 20 per cent of the consideration in cash, while the remaining 80 per cent will be settled through the issuance of Nedbank ordinary shares listed on the Johannesburg Stock Exchange (JSE).
NCBA currently operates in Kenya, Uganda, Tanzania, Rwanda, Ivory Coast and Ghana, with 122 branches and over 60 million customers. Nedbank, headquartered in South Africa, has a primary listing on the JSE and a secondary listing on the Namibia Securities Exchange, and has a presence across Southern Africa and internationally including London, Dubai, the Isle of Man and Jersey.
NCBA said the proposed transaction aligns with Nedbank’s strategy to expand beyond Southern Africa, with East Africa identified as a priority growth region.
The Group added that Kenya’s position as a financial centre, supported by strong institutions, advanced capital markets and a dynamic technology sector, makes it a strategic base for that expansion.
The lender highlighted that its market reputation, digital banking services, asset finance capabilities, investment banking expertise and regional network position it as a suitable partner for Nedbank.
NCBA was formed following the merger of NIC Group PLC and Commercial Bank of Africa Limited. It currently runs 122 branches across East Africa, holds KES 665 billion in assets, disburses over KES 1 trillion in digital loans annually, and has averaged about 19 per cent return on equity since the 2021 financial year.
Following the proposed acquisition, NCBA will become the cornerstone investment vehicle for Nedbank’s East Africa strategy, while remaining NSE listed and keeping its brand and key customer and human capital decisions anchored locally.
NCBA noted that since Nedbank currently only has a representative office in East Africa, there will be no need for in-country integration of systems and operations.
The two organisations expect the deal to create synergies, with Nedbank strengthening NCBA’s Corporate and Investment Banking capabilities through its global presence and cross-border expertise.
At the same time, NCBA said access to an increased resource base will reinforce its infrastructure and support the scaling of operations in Kenya and the wider region.
As part of the transaction, NCBA staff are expected to access training and career growth opportunities across multiple geographies, while customers benefit from deeper capabilities and larger lending capacity.
NCBA said Nedbank has expressed its intention to preserving NCBA’s brand, governance structures, operational model and management team.
Commenting on the proposal, NCBA Group Managing Director John Gachora said, “Nedbank is an ideal partner for our growth in the East Africa region. Nedbank holds around 16 to 17 per cent market share of loans and deposits in South Africa, leads in vehicle and commercial property finance with 36 per cent market shares each, and their overall ESG ratings are top 10 per cent amongst global peers.
Their strong balance sheet will help us scale in our current markets as well as exploring the investment proposition that the DRC and Ethiopia have to offer. We are proud of the brand we have built and look forward to making it central to Nedbank’s East Africa expansion.”
On his part, Nedbank Chief Executive Jason Quinn said, “Nedbank has a strategic objective to grow and diversify outside of its core Southern Africa market, and we identified East Africa as a key growth region. We are therefore excited to partner with a strong and leading financial services firm such as NCBA to deliver on our growth ambitions.”
Jason added that “Kenya’s role as a regional financial hub, supported by strong institutions, sophisticated markets and a dynamic technology sector, makes it a natural anchor for Nedbank’s East African ambitions, including Rwanda, Tanzania and Uganda.
The region’s stable operating environment, consistent macroeconomic performance, a young, growing urbanizing population, and vibrant business community further reinforce its attractiveness and growth potential.”
NCBA said the investment positions Nedbank and NCBA to anchor Kenya as a gateway into broader East African markets, which represent a combined population of about 190 million people with GDP approaching USD 300 billion.
The statement further noted that Ethiopia presents an opportunity with an estimated population of 136 million people and GDP of around USD 135 billion, while the DRC has about 110 million people and GDP of approximately USD 70 billion.
The transaction is subject to various regulatory approvals, including from central banks in the relevant jurisdictions, and is expected to close within six to nine months.
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