HSBC scraps talks over Nedbank purchase

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Global banking giant HSBC announced on Friday that it had scrapped talks with British insurer Old Mutual over the purchase of a majority holding in South Africa's Nedbank.

"HSBC Holdings plc announces that discussions with Old Mutual plc about the possible acquisition of a majority stake in Nedbank Group Limited have not been successfully concluded and have ended," HSBC said in a brief statement.

"Notwithstanding this, HSBC remains committed to the South African market and to growing its business in South Africa."

A company spokesman added that the Nedbank purchase was not in line with its strategy.

"It didn't meet our acquisition criteria," he told AFP, but refused to elaborate further on why the deal collapsed.

Shortly beforehand, Old Mutual had released a separate statement which also revealed the news.

"Old Mutual plc has been informed today that HSBC will not proceed with a partial offer for Nedbank following the expiry of the agreed exclusivity period," the insurance company said.

"Consequently, Old Mutual is no longer in discussions with HSBC concerning its shareholding in Nedbank.

"The reasons for HSBC's withdrawal were not disclosed to Old Mutual, but were not, as far as Old Mutual is aware, related to any adverse findings during HSBC's due diligence."

Old Mutual, which owns 51.5 percent of Nedbank, added that it will now evaluate its options.

In August, the pair had entered into exclusive talks over a deal that would have seen HSBC make an offer to by as much as 70 percent of the South African bank.

Earlier on Friday, press reports had suggested that HSBC was close to abandoning its plans.

© 2010 AFP

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