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Nedbank Group agreed to sell its stake in Ecobank Transnational to a company controlled by the former chairman of the pan-African lender for US$100 million, ending a 17-year alliance.
Johannesburg-based Nedbank will sell its 21,2 percent stake to Bosquet Investments, which is the private investment vehicle of Alain Nkontchou, the managing partner and co-founder of Enko Capital Management LLP and a former chairman of Ecobank, according to a regulatory filing on Friday.
Ecobank’s stock, which trade on the BRVM regional stock exchange in Ivory Coast, has plunged 75 percent over the past decade.
The sale will help Nedbank focus on southern and East African regions of the continent, chief executive officer Jason Quinn said earlier this month. Ecobank has a presence in 33 countries, including 32 across sub-Saharan Africa and one in France.
“We would prefer to own or control all of the operations that we’re involved in,” Quinn said in an interview on Bloomberg TV on August 5. “You can execute strategy much more deliberately when you own businesses.”
The South African lender became Ecobank’s largest shareholder in 2008 through a $500 million investment that was formalised into a partnership in 2014.
Nedbank said its initial investment case had been negatively impacted by the deterioration in the economy of Nigeria, where Ecobank has a large operation, and the exit of various South African clients from the region, which has limited cross-sell opportunities. Synergies between the two businesses had not been forthcoming, it said.
“Nedbank’s decision to sell its Ecobank investment follows a detailed evaluation of the strategic alignment, financial performance, and long-term value proposition,” Quinn said in a statement on Friday. The plan “is consistent with Nedbank’s ongoing efforts to optimise its capital allocation and focus on core growth areas.”
Ecobank has said it plans to expand its operations in Nigeria and other African markets to maintain growth, and expects its new shareholder to back its strategy. — Bloomberg
