HSBC in 'exclusive' talks to buy majority stake in Nedbank
Asia-focused banking giant HSBC announced on Monday that it is in "exclusive" talks with insurer Old Mutual over the potential purchase of a controlling stake in South Africa's Nedbank.
"HSBC Holdings plc has entered into exclusive discussions with Old Mutual plc about the possible acquisition of a majority stake in Nedbank Group Limited, South Africa's fourth largest banking group by total assets," HSBC said in a brief statement to the London Stock Exchange.
"The discussions are ongoing and if successfully concluded would be conditional on, among other matters, obtaining the necessary regulatory approvals."
In a separate statement, Old Mutual revealed that it has received a proposal from HSBC to buy up to 70 percent of Nedbank shares, but did not reveal the price.
Old Mutual added that the proposed deal would be a "major step" in its strategy to reduce the group's complexity, adding that the proceeds would be reinvested and used to cut debt.
Meanwhile, the Financial Times newspaper reported on Monday that HSBC had fended off competition for Nedbank from British-based emerging markets lender Standard Chartered.
The daily business newspaper, which cited people familiar with the talks, added that HSBC's proposed Nedbank deal could lead to a full takeover offer.
HSBC, which is seeking expansion in emerging markets, agreed last month to buy the Indian commercial and retail banking assets of Britain's state-controlled Royal Bank of Scotland.
© 2010 AFP