Absa gets final nod for Barclays deal

Brian Benza
Staff Writer | Tuesday July 23, 2013 00:00

The move is aimed at accelerating expansion on the continent. Under the deal, Barclays' Africa assets will transfer to Absa, creating a unit with 14.4 million customers through a network of more than 1,300 outlets and employing over 43,000 staff across 10 markets.

Barclays will, on the other hand, increase its stake in Absa from 55.5 percent to 62.3 percent. On the JSE, the group will change its name from Absa to Barclays Africa by August 1, 2013.In Botswana, the deal means Absa will take over the 67.8 percent held by Barclays Plc in Barclays Bank Botswana with the balance remaining with the minority shareholders in the Botswana Stock Exchange-listed subsidiary.The transaction excludes Barclays' businesses in Egypt and Zimbabwe due to volatile politics in those countries. British bank, Barclays Plc's efforts to merge its stake in its Botswana subsidiary with its associate, Absa, will not culminate in the local outfit being re-branded, bank officials told Mmegi Business early this year. The proposal would see Barclays wrapping its subsidiaries in Ghana, Tanzania, Uganda, Zambia and the Indian Ocean into Absa while its majority interests in the listed Botswana and Kenyan concerns will be merged with the South African bank.

While the move might result in Barclays subsidiaries in other countries being totally taken over by Absa, the British bank says that the Barclays Botswana will not change names and its listing on the local bourse will remain in place.'Barclays has no intention of re-branding Barclays Bank of Botswana and we can confirm we intend to retain its listing on the Botswana Stock Exchange. Only Barclays holdings in Barclays Bank of Botswana would be included in the proposed combination,' said Barclay Botswana acting head of corporate affairs, Grace Mosinyi.

This means that the 67 percent stake held by the parent company in Barclays Botswana will be transferred to Absa. Barclays Plc bought 55 percent of Absa for $4.5 billion in 2005 as part of an expansion strategy into emerging markets, but the shareholding is now likely to increase if the deal  goes through. Absa is one of South Africa's largest financial services groups with interests in banking, insurance and wealth management. In Botswana, the South African bank opened its insurance business, Absa Life in 2011. Absa is South Africa's third-largest lender.