By Staff Reporter
Standard Bank and the Industrial and Commercial Bank of China (ICBC) confirmed late last week that all the regulatory and shareholder requirements for the transaction between them have been fulfilled.
This will result in ICBC buying a 20 percent stake in Standard Bank. The value of this is N$36.7 billion.
The equity investment is the largest foreign direct investment into South Africa, and considered a landmark transaction for Africa, South Africa and Standard Bank.
This transaction will be implemented on March 3.
Under this scheme, ICBC will acquire 11.11 percent of the aggregate issued ordinary share capital of Standard Bank Group from existing Standard Bank Group ordinary shareholders at a price per share of N$136.
This represents approximately 1.3 times the average annual foreign direct investment in South Africa from 2004 to 2006.
The bank will issue new shares for which ICBC will subscribe.
ICBC has more than 180 million personal bank customers, and 2.5 million corporate banking customers. It has over 16 000 branches and outlets in China, and nearly 100 in the rest of the world.
The proposed partnership, said Standard Bank in South Africa, is anticipated to establish a significant financial services gateway between China and Africa.
It envisages the enhancement of the ability to facilitate trade, particularly the high potential for growth in export volumes to China.
It will further strengthen the stated China government policy of encouraging the establishment of several trading cooperative zones in Africa by 2009.
This proposed transaction, said Standard Bank in South Africa, presents significant opportunities for Africa, and in particular for South Africa.
“Standard Bank stands to benefit from a substantial issue in its tier one capital base, strong support for its international growth strategy and the potential for significant business cooperation between two complementary banks,” said Standard Bank.
“From Standard Bank’s perspective, a valuable alliance would be established with a bank of significant size on a global scale. The fact that a bank as large as ICBC has a strategy that is complementary to that of Standard Bank’s, and seeks to support Standard Bank in the execution of its own strategies, provides a unique opportunity for further cooperation to support Standard Bank’s growth.”