South Africa’s Nedbank Group Limited has moved to take control of NCBA Group PLC, proposing to acquire approximately 66 per cent of Kenya’s third-largest listed bank by market value in a deal that could become one of East Africa’s most significant cross-border banking transactions in recent years.
In a statement dated January 21, Nedbank said it has already secured binding commitments covering 71.2 per cent of NCBA’s issued share capital, significantly reducing execution risk as the transaction enters the regulatory approval stage.
Under the proposed structure, about 34 per cent of NCBA’s shares would remain publicly traded on the Nairobi Securities Exchange (NSE), even as Nedbank gains effective control and NCBA becomes a subsidiary of the South African lender.
Nedbank, which is listed on the Johannesburg and Namibia stock exchanges, reported trailing twelve-month revenue of approximately ZAR 69 billion and net profit of about ZAR 16 billion attributable to shareholders, according to its latest disclosures.
The South African bank plans to acquire around 1.09 billion NCBA shares through a partial pro-rata tender offer. NCBA’s largest shareholders collectively control nearly 72 per cent of the register, underpinning the high level of commitments already secured.
The transaction values NCBA at roughly 1.4 times book value and features a mixed cash-and-share consideration. For every 100 NCBA shares tendered, shareholders would receive 4.02994 newly issued Nedbank shares—representing 80 per cent of the consideration—alongside a cash payment of KSh 2,100, accounting for the remaining 20 per cent.
Nedbank shares will be issued at ZAR 250 each, using a fixed exchange rate of KES 7.7143 to the rand. Where shareholders are unable to hold offshore-listed shares, or where fractional entitlements arise, the offer provides a cash alternative of KSh 10,500 per 100 NCBA shares. Any fractional Nedbank share entitlements will be rounded down in line with Johannesburg Stock Exchange rules, with residual amounts settled in cash.
NCBA confirmed receipt of the strategic investment proposal, stating that the transaction would position the group as Nedbank’s primary platform for East Africa. NCBA operates across Kenya, Uganda, Tanzania, Rwanda, Côte d’Ivoire and Ghana, with 122 branches serving more than 60 million customers.
The lender reported assets of approximately KSh 665 billion and said it disburses over KSh 1 trillion in digital loans annually, delivering an average return on equity of about 19 per cent since 2021.
Nedbank said it has received irrevocable undertakings from shareholders representing 71.2 per cent of NCBA’s issued shares to accept the offer for their pro-rata entitlements, with an option to apply for excess shares subject to allocation rules. The identities of the shareholders were not disclosed.
Completion of the transaction is subject to approvals from multiple regulators, including the Capital Markets Authority, the Central Bank of Kenya, and competition authorities in Kenya and other relevant jurisdictions. Nedbank also plans to seek an exemption from Kenya’s mandatory takeover rules, allowing it to acquire a controlling stake without launching a full takeover offer.
If the exemption is not granted, an alternative mechanism has been built into the transaction structure to ensure Nedbank’s final shareholding does not exceed the targeted 66 per cent by more than a narrow margin.
For Nedbank, the acquisition represents a major expansion beyond its Southern African stronghold. The predominantly share-based consideration is expected to limit pressure on the group’s cash position and capital ratios.
Subject to regulatory approvals, the deal is expected to close within six to nine months, a move that would significantly reshape the ownership of one of Kenya’s most systemically important banks while maintaining public participation through the NSE.
