South African financial giant Nedbank Group has formally announced its intention to acquire a controlling 66% stake in NCBA Group, signaling the biggest M&A deal in East Africa's banking history. The transaction is valued at approximately USD 856 million (KES 111.3 billion), a figure that underscores Kenya's status as the regional financial hub.

The deal, structured as a mix of cash and shares, will see Nedbank pay 20% in hard currency and 80% through new shares listed on the Johannesburg Stock Exchange (JSE). This hybrid model offers Kenyan shareholders a rare opportunity to gain exposure to the South African market while cashing in on their local investment.

A "Managed Evolution"

Nedbank CEO Jason Quinn described the acquisition as a decisive step in their "Managed Evolution" strategy to expand beyond Southern Africa. "Kenya's role as a regional financial hub makes it a natural anchor for our East African ambitions," Quinn stated. The deal values NCBA at 1.4 times its book value—a premium that has excited investors.

NCBA Group MD John Gachora welcomed the move, terming Nedbank an "ideal partner." With NCBA boasting 122 branches across five countries, the injection of Nedbank's capital is expected to supercharge its expansion into new frontiers like the DRC and Ethiopia.

• The Structure: Post-acquisition, NCBA will become a subsidiary of Nedbank but will retain its brand, local management, and listing on the Nairobi Securities Exchange (NSE) with a 34% free float.
• The Impact: This acquisition effectively shifts the center of power for one of Kenya's largest banks to Johannesburg, following a trend of South African lenders deepening their roots in East Africa.

Market dominance

For the average Kenyan customer, little will change on day one. However, the long-term play is clear: a banking behemoth capable of financing massive infrastructure projects and cross-border trade is being born. The "Big Five" of Kenyan banking are no longer just competing with each other; they are becoming global franchises.

As regulators review the paperwork, the Nairobi bourse is bracing for activity. If approved, this deal redefines the ceiling for bank valuations in the region.