South African bank Absa is in talks to buy the local branch business of its parent firm Britain's Barclays as the two firms strive to create Africa's leading bank, Absa said on Thursday.
Absa said in a statement it would pay 578 million rand ($90.52 million) in cash for Barclays' South African Branch Business, which comprises Barclays Capital South Africa and its corporate and business banking unit.
The price tag reflects the net asset value of the businesses at the end of August and would be adjusted to reflect the value when the deal is done, which was expected to be January 1, Absa said in a statement.
Barclays bought a 56 percent stake in South Africa's biggest consumer bank earlier this year for about 28 billion rand ($4.39 billion) in post-apartheid South Africa's biggest foreign direct investment.
Under the deal, Absa has said it will buy Barclays' South African operations and its businesses in nine other African countries with the aim of becoming the continent's biggest bank within five years, overtaking Standard Bank.
"Both the Absa and Barclays boards support the vision of creating the pre-eminent bank in Africa and have agreed in principle ... to integrate on an arm's length basis Barclays South Africa and the other Barclays Africa Sub-Saharan businesses into Absa," Absa said in a statement.
The acquisition of Barclays' branch business was the first step in achieving the goal, it added.