South Africa's biggest retail bank Absa, majority-owned by Barclays Plc, has reached an all-share deal to acquire the British bank's operations in Africa to allow it to expand on the continent and catch up with rivals. As part of a $2.1 billion deal first outlined in August Barclays will raise its stake in Absa, South Africa's third-largest bank by value, to 62.3 percent from 55.5 percent.
Absa had been prevented from expanding into Africa as its parent was already operating in the region, effectively ceding some lucrative markets to bigger rivals such as Standard Bank and FirstRand. Absa will be renamed Barclays Africa Group Ltd but will retain the Absa brand for its retail and card business in South Africa once the transaction is completed in the first half of next year, the banks said in a joint statement.
Barclays plans in the region were revealed in August as a "One Africa" strategy and a platform for further growth. Some of Barclays' operations that will be folded into Absa as part of the deal have been running for close to a century and cover Botswana, Ghana, Kenya, Mauritius, Seychelles, Tanzania, Uganda and Zambia. Barclays first mooted the idea of selling its African assets to Absa when it acquired the lender in 2005, but the pair couldn't agree on price.