South Africa’s Nedbank Group Limited has taken steps to assume control of NCBA Group PLC, proposing to acquire roughly 66% of Kenya’s third-largest listed bank by market value in a transaction that would rank among East Africa’s most significant cross-border banking deals in recent years.
Nedbank said it has already secured binding commitments covering 71.2% of NCBA’s issued share capital, substantially lowering execution risk as the transaction moves into the regulatory approval phase. Under the proposed structure, about 34% of NCBA’s shares would remain publicly traded on the Nairobi Securities Exchange, even as Nedbank gains effective control and NCBA becomes a subsidiary of the South African lender.
The Johannesburg- and Namibia-listed group reported trailing twelve-month revenue of approximately ZAR 69 billion and net profit attributable to shareholders of about ZAR 16 billion, according to its latest disclosures.
In a notice dated January 21, Nedbank said it intends to acquire around 1.09 billion NCBA shares through a partial pro-rata tender offer. NCBA’s largest shareholders collectively hold close to 72% of the register, highlighting the concentration of ownership underpinning the commitments already in place.
Transaction Structure
The deal values NCBA at about 1.4 times book value and combines equity and cash consideration. For every 100 NCBA shares tendered, shareholders would receive 4.02994 newly issued Nedbank shares, representing 80% of the consideration, alongside a cash payment of KSh 2,100, accounting for the remaining 20%. Nedbank shares will be issued at ZAR 250 each, using a fixed exchange rate of KES 7.7143 to the rand.
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Where shareholders are unable to hold offshore-listed shares, or where fractional entitlements arise, the offer provides for a cash alternative of KSh 10,500 per 100 NCBA shares. Fractional Nedbank share entitlements 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, noting that the transaction would position the bank as Nedbank’s main platform for East Africa. NCBA operates in Kenya, Uganda, Tanzania, Rwanda, Côte d’Ivoire and Ghana, with 122 branches serving more than 60 million customers. The group reported assets of about KSh 665 billion and said it disburses over KSh 1 trillion in digital loans annually, delivering an average return on equity of around 19% since 2021.
Regulatory Path
Nedbank said it has obtained irrevocable undertakings from shareholders representing 71.2% of NCBA’s issued shares to accept the offer for their pro-rata entitlements, with the option to apply for excess shares subject to allocation rules. The identities of the committing shareholders 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 plans to seek an exemption from Kenya’s mandatory takeover rules, allowing it to secure a controlling stake without launching a full offer for the remaining shares.
If the exemption is not granted within the required timeframe, the structure includes an alternative mechanism to ensure Nedbank’s final holding does not exceed its targeted 66% by more than a narrow margin.
For Nedbank, the acquisition marks a major expansion beyond its Southern African base. The heavy weighting toward share-based consideration limits strain on the group’s cash position and capital ratios.
Subject to regulatory clearance, Nedbank expects the deal to close within six to nine months. If completed, the transaction would significantly reshape the ownership of one of Kenya’s most systemically important banks while retaining public market participation through the Nairobi Securities Exchange.
