HSBC on acquisition track
(24 August 2010 – Global) HSBC is in exclusive talks to secure its first acquisition since the global financial crisis.
The international lender is in discussions to buy South Africa’s fourth biggest lender Nedbank from Old Mutual.
The US$6.8 billion (A$7.64 billion) deal for a 52 percent share in Nedbank will allow HSBC to break into the South African market alongside other banking heavyweight Barclays, who current owns a 51 percent share of the market leader Absa.
The Industrial and Commercial Bank of China (ICBC) also boasts a 20 percent holding in the second largest lender in the nation, Standard Bank.
While HSBC is in a position to finance the deal without raising equity, many industry insiders believe that they will go to shareholders to raise extra funds to bolster capital as well as make other acquisitions.
The acquisition is seen as a complementary to HSBC’s Asian operations.
Nedbank will also allow Europe's biggest bank to break into South Africa's retail market.
Nedbank has 443 branches and 27,000 employees.
HSBC said that its discussions with Old Mutual were ‘ongoing’.
The US$6.8 billion (A$7.64 billion) deal for a 52 percent share in Nedbank will allow HSBC to break into the South African market alongside other banking heavyweight Barclays, who current owns a 51 percent share of the market leader Absa.
The Industrial and Commercial Bank of China (ICBC) also boasts a 20 percent holding in the second largest lender in the nation, Standard Bank.
While HSBC is in a position to finance the deal without raising equity, many industry insiders believe that they will go to shareholders to raise extra funds to bolster capital as well as make other acquisitions.
The acquisition is seen as a complementary to HSBC’s Asian operations.
Nedbank will also allow Europe's biggest bank to break into South Africa's retail market.
Nedbank has 443 branches and 27,000 employees.
HSBC said that its discussions with Old Mutual were ‘ongoing’.
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