NCBA Group chief executive officer John Gachora has spoken up on how the banking group came to accept a takeover offer from South Africa’s Nedbank Group.
According to Mr. Gachora, the Nedbank takeover offer was the preferred option as it came with minimal disruption to the NCBA’s main business model, staff, and brand.
“There will not be any overlaps between us and Nedbank, and therefore, we do not envision our employees being affected negatively,” he said. “In fact, this creates opportunities for employee development, training, and growth since we will be an important subsidiary for Nedbank.”
This means that NCBA Group will be able to preserve its identity and avoid the integration disruptions that have often been witnessed with previous mergers in the banking sector in the region.
“We have built over time what I think is a fantastic brand and one of the most highly-rated financial institutions in this region,” said Mr. Gachora. “We do attract a lot of interest. From time to time, we get approaches, and we have to examine and review the approaches we get and make decisions.”
Mr. Gachora however, did not confirm if NCBA Group had received an offer from Stanbic Bank’s parent company the Standard Bank Group, which is also from South Africa.
“I cannot tell you, but when we examined the Nedbank conversation, it met the merit for us to want to recommend it to our shareholders, and that is how we got here,” he said.
In the offer by Nedbank, the South African group is looking to acquire a controlling stake of up to 66 percent in NCBA.
This will be through a shares purchase that is estimated to be of a value of 13.9 billion rands (about Sh109.9 billion). This purchase will be done through a mix of cash and Nedbank shares.
This acquisition has already been backed by the top NCBA shareholders who hold up to 71.2 percent stake.
“Nedbank does not have a presence in the markets where we operate except for a representative office in Nairobi, and therefore we will not be going through a painful integration of either systems, policies, or people,” said Gachora.
“This, makes it a much easier transaction for our staff and customers. This was a big consideration for our board in considering what kind of transaction they would be willing to recommend to shareholders.”
The acquisition offer has sparked a rally on the NCBA share. On Thursday when the news broke, the counter soared by Sh8.50 per share which was equivalent to a gain of 9.47 percent to close trading at Sh98.25 per share from the previous day’s Sh89.75 per share.
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