The Central Bank of Kenya has approved the acquisition of up to 66 percent of NCBA Group Plc by South Africa’s Nedbank Group Limited, clearing a major hurdle for the Sh110 billion transaction. According to a public notice issued by the regulator, the approval was granted on August 28 under Section 13 (4) of the Banking Act, bringing the cross-border deal into its final stretch.
Shareholder Response and Valuation Details
Investors trading on the Nairobi Securities Exchange-listed NCBA are slated to receive Sh23.2 billion in cash alongside 46.63 million shares in Nedbank once the transaction concludes. According to NCBA, Nedbank’s tender offer, which closed on July 10, drew valid acceptances covering roughly 79.9 percent of issued ordinary shares. This level of participation represents a 121 percent oversubscription against the 66 percent stake initially sought by the South African buyer.
Financial analysis shows Nedbank is paying approximately 1.4 times NCBA’s book value. According to market data, this valuation sits above several recent regional banking transactions, such as Access Bank acquiring the National Bank of Kenya at roughly 1.25 times book value and Equity Group’s purchase of Rwanda’s Cogebanque at about 1.26 times book value.
Did you know? Nedbank’s decision to pursue a controlling stake in NCBA follows a strategic capital reallocation review under CEO Jason Quinn, which included exiting a minority holding in Ecobank Transnational to focus on markets where the lender can exercise direct operational control.
Strategic Rationale and Regional Expansion
Nedbank views East Africa as a core growth market driven by expanding populations, rising financial inclusion, and stronger trade corridors linking the region to the Middle East and Asia. According to Nedbank leadership, acquiring a controlling platform was essential to executing this strategy effectively, avoiding the limitations associated with minority shareholdings.
Upon completion of the deal, NCBA—an institution historically associated with the families of founding President Jomo Kenyatta and former Central Bank of Kenya Governor Phillip Ndegwa—will operate as a Nedbank subsidiary. However, the bank will retain its established brand, existing management team, and headquarters in Nairobi.
Pending Approvals and Settlement Timelines
While the Central Bank of Kenya has signed off on the purchase, the transaction remains subject to a few remaining regulatory conditions given the multi-country footprints of both institutions. According to NCBA Group CEO John Gachora, other regulatory clearances have already been secured from South Africa’s Prudential Authority and Financial Surveillance Department, Kenya’s Capital Markets Authority, the National Bank of Rwanda, the Bank of Tanzania, and several regional competition authorities.
“The remaining regulatory approvals are progressing in accordance with their timelines and sequencing,” John Gachora stated in a press release, adding that the group remains committed to managing the transition responsibly for customers, employees, and shareholders.
Once all conditions are satisfied and the transaction becomes fully unconditional, Nedbank has committed to paying participating shareholders within 14 trading days.
Frequently Asked Questions
What percentage of NCBA does Nedbank actually own now?
While the tender offer attracted acceptances representing 79.9 percent of NCBA’s issued ordinary shares, Nedbank is acquiring up to a 66 percent shareholding following the regulatory approvals.
How will shareholders be compensated?
Accepting investors will receive a combination of cash totaling Sh23.2 billion and 46.63 million shares in Nedbank.
Will NCBA change its name or move its headquarters?
No. Upon completion, NCBA will become a Nedbank subsidiary but will keep its brand name, executive management team, and headquarters based in Nairobi.
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