Nedbank Group's majority shareholder, London-listed Old Mutual has received a proposal from HSBC, one of the largest global banking organisations, to acquire a controlling shareholding in Nedbank Group.
"Should the proposed transaction go ahead, Nedbank Group will remain listed on the JSE and the Namibian Stock Exchange," Nedbank said in a statement on Monday.
According to Nedbank Group chairman, Dr Reuel Khoza, Old Mutual, which holds a 53 percent stake, had been "a supportive parent" and together the companies had contributed to the growth in their respective businesses.
"Earlier this year, Old Mutual announced a change in strategy to build a long-term savings, protection and investment group.
"This led to Old Mutual re-evaluating several of its investments which may not be aligned with its new vision and strategy, including the investment in Nedbank Group," he said.
In addition, Old Mutual believed that the proposed transaction would have numerous benefits for South Africa.
Nedbank chief executive Mike Brown said the group had built a solid platform from which it could grow and service its clients.
"Our vision is to build Africa's most admired bank by strategically focusing on areas with strong economic profit potential in South Africa and in Africa.
"We believe a strong international banking partner could accelerate the delivery of our vision.
"A global bank as a controlling shareholder could provide access to financial, technical and operational support to improve the Nedbank Group's competitive position in South Africa and the greater African continent for the benefit of all its stakeholders, including employees, customers and investors," Brown said.
The transaction was subject to a due diligence process and regulatory approvals, by among others the SA Reserve Bank and Finance Minister Pravin Gordhan.
Khoza said the regulators in South Africa had a proven track record of ensuring the stability of South African banks and the banking system as a whole.
HSBC has been granted a period of exclusivity by Old Mutual to conduct a due diligence exercise.
Following this process, HSBC may approach the Nedbank Group's board to make a partial offer to all shareholders (including Old Mutual) to acquire control of Nedbank Group.
Khoza said Nedbank Group has a strong and independent board to guide it through the proposed transaction.
"The board and management believe having a large global banking group as a controlling shareholder could be in the best long term interests of Nedbank Group and all its stakeholders," he said.
Source: The Times
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