CFC/Stanbic merger nears completion

CFC/Stanbic merger nears completion

July 05, 2007/ Punch

 

 

Standard Bank, Africa’s leading banking group ranked by assets, earnings and market capitalisation, has entered the final stages of its planned merger with CFC Bank Limited as part of its ambitious growth strategy, Stanbic Bank’s Managing Director Mike du Toit has said.

 

The recent announcement of the deal, following the signing of a conditional agreement by Stanbic Africa Holdings Limited, Stanbic Bank

 

 

Kenya and the CFC Group, including the latter’s 45.6 per cent shareholder, Gambit Holdings Limited, is part of a statutory process requirement.

 

 

A statement from Corporate and Financial, media consultant to the bank, on Wednesday said that the agreement set out the details of the merger through an exchange of shares by both institutions, firstly for CFC to acquire 100 per cent of SBK and simultaneously for the banking business of CFC Bank to be hived down to Stanbic.

 

 

 

 

 

 

 

The end result will see Standard Bank Group owning 60 per cent of the issued share capital of CFC Group (including the insurance, stock broking and investment banking units) and the commercial banking businesses of CFC Bank and SBK merged into one entity.

 

 

 

 

 

 

 

In the statement, du Toit said that Standard Bank Group’s ‘need for scale’ strategy in Kenya had been the key driver in positioning the bank for this transaction and that CFC proved to be a perfect match to enable the merged entity to achieve accelerated growth.

 

 

 

 

“We have now completed the negotiations with CFC Bank and certain key parties to the transaction, which were conducted in a remarkably positive spirit by all involved,†he said.

 

 

 

 

 

 

 

“Our clients and those of CFC can anticipate a significantly enhanced product offering from what will be

 

 

Kenya’s most integrated financial services group. At this stage, we are engaged in very detailed integration planning to ensure that customer service and product offerings are not in any way compromised by the merger process,†du Toit added.

 

 

 

 

Although the agreement, signed last week, is a crucial phase in the process, du Toit stressed that there were a number of regulatory approvals and formal authorisations from shareholders required. These include the Ministry of Finance, the Central Bank of

 

 

Kenya, the Capital Markets Authority and the Monopolies Commissioner. The intention is for the business to remain listed on the NSE. In addition, the South African Reserve Bank needs to give the transaction its blessing.

 

 

 

 

The Managing Director of CFC Bank, Mr. Madabhushi Soundararajan, said, “We are extremely happy with the results of the negotiations, which have been conducted in a frank and friendly atmosphere.â€ÂÂÂÂÂ

 

 

 

 

 

 

 

Soundararajan added, “We have been receiving invaluable support and advice from the regulators throughout the process and are very grateful for the role they have played thus far.â€ÂÂÂÂÂ

 

 

 

 

 

 

 

Upon the successful completion of the agreements between the parties and the implementation of the proposed merger scheme, the SBK will become a wholly-owned subsidiary of CFC Bank, the listed entity and Stanbic Africa Holding Limited will acquire the vendor shares from Gambit’s shareholders.


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