Absa (ASA) and Barclays are in negotiations about combining the majority of the Barclays Africa operations with Absa.
The companies issued a cautionary announcement on Tuesday‚ advising that in line with their strategy to operate as One Bank in Africa‚ they are engaged in discussions.
This is expected to involve the combination of Barclays interests in Botswana‚ Ghana‚ Kenya‚ Tanzania‚ Uganda‚ Zambia and the Indian Ocean with Absa‚ with Barclays Bank PLC remaining as the majority shareholder of the combined African operations.
The listings of Barclays subsidiaries in Kenya‚ on the Nairobi Securities Exchange‚ and in Botswana‚ on the Botswana Stock Exchange‚ would be maintained. Only Barclays holdings in these listed subsidiaries would be included in the proposed combination.
The proposed combination would be subject to‚ among other things‚ the approval of the Boards of Barclays and Absa‚ as well as Absa shareholder approval and regulatory approvals in the relevant jurisdictions.
There can be no certainty that these discussions will lead to a combination. The proposed combination would not be expected to be completed until 2013‚ they said.
“Whether or not successfully concluded‚ the proposed combination may have a material effect on the price of Absa's shares. Accordingly‚ shareholders are advised to exercise caution when dealing in Absa's shares until a further announcement is made‚” they added.
Absa Group's business is conducted primarily in South Africa‚ but it also has equity holdings in banks in Mozambique and Tanzania‚ representative offices in Namibia and Nigeria and bancassurance operations in Botswana‚ Mozambique and Zambia.
The businesses in scope for the proposed combination employ more than 8‚000 people and have a network of more than 400 branches and 750 ATMs serving approximately 2.2 million customers. As at December 2011‚ the Barclays Africa businesses in scope for the proposed combination had total assets of approximately GBP6 billion.