Standard Bank Group and its Argentinean partners have signed an agreement with Industrial and Commercial Bank of China (ICBC), which is a 20% shareholder in Standard Bank Group, for the sale of a majority stake in Standard Bank Argentina (SBA).
In terms of the agreement, ICBC will purchase an 80% shareholding in SBA for an estimated cash consideration of US$600 million, valuing 100% of Standard Bank Argentina at US$750 million. Standard Bank Group will sell 55% of its current 75% shareholding and retain a 20% shareholding in SBA. It will realise an estimated US$400 million after transaction costs and has committed its US$20 million share of a US$100 million capital injection to fund SBA's future growth, resulting in net proceeds of US$380 million. The deal is subject to regulatory approvals and is expected to be completed in the first half of 2012.
Jacko Maree, Standard Bank Group Chief Executive says: "Over the past few months there has been speculation in the media about Standard Bank Group selling all or part of its shareholding in Standard Bank Argentina. We chose not to comment at the time, but preferred to wait until we had certainty and had engaged with the appropriate authorities before making details of any proposed deal public.
"Since December we have received a number of unsolicited indicative offers for SBA, including an approach from our strategic partner, ICBC. Of all the indicative offers, ICBC's was the most attractive. We know ICBC well, work closely together and have developed a sound relationship with them.
"Our refined strategic focus is on serving the needs of our customers through first-class, on-the-ground, operations in chosen countries in Africa. We will also connect other selected emerging markets to Africa and to each other, applying our sector expertise, particularly in natural resources, globally.
"We have been operating in Argentina for over 12 years, meaningfully increasing our presence in 2007 when we acquired the operations of BankBoston. While SBA has been a profitable and well-managed acquisition for the group, it is currently our only universal banking operation outside the African continent.
The proposed transaction presents an opportunity to realise value from the group's successful investment in Argentina and also offers us the opportunity to continue to develop our partnership with ICBC and to help connect Argentina to Africa and other selected emerging markets, including Brazil and China."
With China being Argentina's second largest trading partner, the proposed transaction will provide ICBC with an entry point into Argentina as the first Chinese bank to operate there.
The proceeds on disposal will realise and release a significant amount of capital for Standard Bank from outside the African continent.
Myles Ruck, SBA's current Chairman and Standard Bank Group board member, will continue to serve on the board of the Argentinean bank together with an additional Standard Bank appointee.
Standard Bank Group facilitation of Woolworths' ground-breaking acquisition wins Deal of the Year ....
Standard Bank Arranges USD 1.25 Billion Eskom Bond Sale to International Investors