UK banking group Barclays Plc (LON:BARC) said on Thursday its South African subsidiary Absa Group Limited (PINK:AGRPY) will buy most of its business in Africa in an all-stock deal worth ZAR18.33bn (USD2.1bn/EUR1.6bn), to create a top pan-African financial services group.
With this move, Barclays advances its One Bank in Africa strategy by combining with a top sub-Saharan African banking franchise, it said.
Under the terms of the agreement, Absa is paying 129.5m own ordinary shares for Barclays Africa Limited, comprising Barclays’ banking stakes in Botswana, Ghana, Kenya, Mauritius, Seychelles, Tanzania, Uganda and Zambia, as well as the Barclays Africa Regional Office in Johannesburg. Barclays operations in Egypt and Zimbabwe are not included in this transaction.
The deal will see Barclays raising its interest in Absa to 62.3% from current 55.5%, the banks said.
Following the combination, Absa will change name to Barclays Africa Group Limited and its board will be reconstituted. The independent directors of Absa are backing the deal, which also needs to secure the approval of its shareholders other than Barclays, as well as regulatory clearances.
The combined bank will have some 14.4m customers served by over 43,000 staff at more than 1,300 outlets in ten countries.
Completion is expected in the first half of 2013.
Goldman Sachs International is advising Barclays.