South Africa’s Nedbank Sells Stake in Ecobank for $100 Million

For $100 million, Nedbank Group Ltd. consented to sell its interest in Ecobank Transnational Inc. to a business owned by the former chairman of the pan-African lender.

According to a regulatory statement on Friday, Johannesburg-based Nedbank will sell its 21.2% interest to Bosquet Investments, the private investment company of Alain Nkontchou, a former chairman of Ecobank and managing partner and co-founder of Enko Capital Management LLP.

The 17-year strategic partnership that allowed Nedbank to grow outside of its home region will come to an end with the sale of its interest in Ecobank, a bank located in Togo. Over the last ten years, Ecobank’s stock, which is traded on the BRVM regional stock exchange in Ivory Coast, has fallen by 75%.

“We would prefer to own or control all of the operations that we’re involved in,” Nedbank Chief Executive Officer Jason Quinn said in an interview on Bloomberg TV on Aug. 5. “You can execute strategy much more deliberately when you own businesses.”\

In 2008, the South African lender invested $500 million to become Ecobank’s largest stakeholder, and in 2014, the relationship was formally established. Nedbank gained access to the West African bank’s 33-country operations through the acquisition, including 32 in sub-Saharan Africa and one in France.

Nedbank said that the decline in Nigeria’s economy, where Ecobank has a sizable presence, and the departure of some South African customers from the area, which has reduced cross-selling prospects, had a detrimental effect on its initial investment case. It said that there had been no signs of synergies between the two companies.