Barclays will pay 33 billion rand ($5.5 billion) in cash for 60% of Absa, South Africa's biggest retail lender, to boost its non-UK profits, the British bank said this morning.
Barclays is offering 82.5 rand a share and Absa will also pay its shareholders a dividend of two rand a share, Barclays said in a statement. Britain's third-biggest bank has gained written approval from 63% of Absa's shareholders, the bank said.
'This transaction accelerates our strategy to internationalise Barclays' earnings and increase exposure to selected high-growth, well-run markets,' Barclays CEO John Varley said in the statement.
Synergies from combining the two banks' businesses will increase Absa's pretax annual profit by about 1.4 billion rand four years after the deal is completed, Barclays said.
Barclays has been in talks to buy the stake in Absa since September as it sought regulatory and shareholder approval for the deal, which is the biggest direct investment in South Africa and Barclays' biggest outside the UK.
The deal will mark Barclays' return to mainstream banking in South Africa after it was forced to exit in 1986 amid protests in Britain over it doing business under the racist apartheid regime. Before selling its business at a loss, Barclays was South Africa's biggest bank.
