South Africa’s Nedbank Group Limited has formally launched a multibillion-shilling bid to acquire a controlling stake in NCBA Group Plc, a move that could significantly reshape Kenya’s banking landscape if approved by regulators and shareholders.
In a notice to shareholders and the investing public on Monday, February 9, NCBA confirmed that it had received an Offeror’s Statement from Nedbank detailing the structure, conditions, and strategic intent behind the proposed transaction. The deal places the value of the targeted stake at approximately KSh110 billion and would hand Nedbank effective control of NCBA while keeping the lender listed on the Nairobi Securities Exchange (NSE).
Unlike a full takeover, the proposal is structured as a partial pro rata offer, allowing Nedbank to acquire about two-thirds of NCBA’s issued share capital. Under the plan, Nedbank intends to purchase approximately 1.087 billion ordinary shares, representing around 66 per cent of the bank’s total shareholding, subject to regulatory approvals in Kenya and other relevant jurisdictions.
NCBA explained that the structure of the offer allows existing shareholders to tender up to 66 per cent of their holdings, with limited room to offer additional shares depending on final allocations. This approach is designed to ensure continued public participation in the bank while granting Nedbank operational and strategic control.
The consideration offered to shareholders is a combination of equity and cash, with shares forming the larger portion. For every 100 NCBA shares tendered and accepted, shareholders will receive 80 per cent of the consideration in Nedbank shares and the remaining 20 per cent in cash. Specifically, the offer provides for the issuance of Nedbank ordinary shares valued at ZAR 250 each, alongside a cash payment of KSh2 million per qualifying allotment.
The valuation of the Nedbank shares is based on South African market prices and prevailing foreign exchange rates, using a KES/ZAR spot exchange rate of 7.7143 as of December 18, 2023. However, NCBA noted that not all shareholders will receive Nedbank shares. Investors whose entitlements fall below 200 Nedbank shares will instead receive their full consideration in cash.
To enable the transaction to proceed as a partial acquisition rather than a mandatory full takeover, Nedbank has applied to Kenya’s Capital Markets Authority (CMA) for regulatory exemptions under the Takeovers and Mergers Regulations. According to NCBA, Nedbank argues that the structure of the deal serves the public interest by preserving domestic shareholding, supporting long-term capital investment, and strengthening management and technical capabilities within the group.
Despite the advanced stage of the proposal, NCBA cautioned that the offer remains conditional. If Nedbank fails to secure the required CMA exemption by May 31, 2026, the offer will automatically lapse and be rendered null and void. Shareholders have been advised to exercise caution and seek professional guidance before making any investment decisions.
If completed, the transaction would see Nedbank emerge as the controlling shareholder in NCBA Holding Company, while approximately 34 per cent of the bank’s shares would remain in the hands of public investors on the NSE.
The development follows an earlier cautionary statement issued by NCBA in January, warning that the proposed transaction could materially affect the price of its securities. At the time, the bank urged investors to be mindful of market volatility as regulatory reviews and shareholder decisions progress.
NCBA also clarified that Nedbank currently holds no direct or indirect stake in the group, apart from binding commitments already secured from certain shareholders. According to the bank, Nedbank has obtained irrevocable undertakings from shareholders representing about 71.2 per cent of NCBA’s issued shares, agreeing to accept the tender offer on a pro-rata basis, subject to specified terms and conditions.
Should the tender offer be fully taken up, Nedbank would control roughly 66 per cent of NCBA, with the possibility of a marginal increase—capped at five percentage points—under alternative scenarios allowed by the offer terms. Nedbank has reiterated its intention to maintain NCBA’s listing on the Nairobi Securities Exchange following completion of the transaction.
As regulatory scrutiny intensifies and shareholder deliberations continue, the proposed acquisition is being closely watched as one of the most significant cross-border banking deals in East Africa in recent years, with far-reaching implications for competition, governance, and capital flows within the region’s financial sector.
