African Bank and Grindrod Bank merger gets nod
The Competition Tribunal has approved the proposed merger that will see African Bank acquire Grindrod Bank in a R1.5bn deal.
“The tribunal has unconditionally approved the large merger wherein African Bank intends purchasing all of the issued ordinary shares in Grindrod Financial Holdings and all of the issued preference shares in Grindrod Bank from Grindrod Ltd as one indivisible transaction,” the tribunal said.
The deal is pending approval from regulators ranging from the Prudential Authority (PA) to the National Credit Regulator and finance minister Enoch Godongwana.
Foreseeing little resistance to the proposed merger, both parties embarked on a 100-day bedding-down process in June aimed at plotting the way forward to kick-start the creation of a new business banking unit in the merged entity.
“Grindrod is very pleased with the confirmation received from the Competition Tribunal and now awaits the final approvals from the SA Reserve Bank and minister of finance,” Andrew Waller, CEO of Grindrod Bank’s parent company Grindrod, told Business Day.
Grindrod Bank, which specialises in financial services for private, corporate, and institutional clients and has a strong client base in KwaZulu-Natal and Gauteng, was established as a boutique merchant bank in 1994, and received its licence two years later.
Grindrod is selling the bank as part of a strategic focus on freight services, while African Bank will gain a bigger footprint in business banking after being a mainly consumer-focused lender. In August African Bank announced it is also seeking additional scale in an R80m deal to buy the assets of Ubank, which is under curatorship.