Ecobank Transnational Incorporated (ETI) and Nedbank Group Limited on Thursday announced that Nedbank Group is to acquire a 20 percent shareholding in ETI.
Nedbank Group will subscribe in cash for 4,512,618,890 new ETI shares for USD493.4 million.
ETI will repay Nedbank’s loan of USD285 million granted to ETI in 2011 out of the subscription proceeds.
In line with the agreement with ETI, the Nedbank Group will be afforded the right to representation on the ETI board.
The Nedbank Group has nominated its chief operating officer, Graham Dempster, to join the ETI board and ETI will exercise its reciprocal right to an appointment on the Nedbank Group board. Both board appointments are subject to regulatory approvals.
Commenting on the investment, ETI Group chief executive officer, Albert Essien, said: “We welcome this important investment by Nedbank Group, which increases the ETI capital base. It is a win-win for ETI and Nedbank Group. Our two institutions have been strong strategic partners since we formed our unique one-bank alliance six years ago, and it is in our mutual interest to ensure that this alliance grows from strength to strength. It will remain steadfast as we continue to provide the best quality banking services to our numerous clients across the largest banking network in Africa.”
Mike Brown, Nedbank Group chief executive, noted: “This shareholding represents an important step in the consolidation and deepening of the strategic and technical banking alliance we have with ETI. Nedbank Group’s clients are increasingly expanding their business operations into the rest of Africa, and Nedbank Group’s own operations in Southern and East Africa, combined with ETI’s unrivalled pan-African footprint and strength in West and Central Africa provides our clients with access to banking solutions across 39 African countries. This investment also offers our shareholders participation in earnings growth from the faster growing markets in sub-Saharan Africa.”
ETI and Nedbank Group established their strategic business alliance in 2008, with the aim of providing seamless banking services across the continent to each other’s clients. This transaction deepens the alliance and includes a commitment to reciprocal technical banking expertise and management support. Together, ETI and Nedbank Group will offer a unique one-bank experience to their clients across the largest banking network in Africa, comprising more than 2,000 branches and offices in 39 countries.
