The Central Bank of Kenya (CBK) has announced that it has approved the takeover of National Bank of Kenya by Kenya Commercial Bank Group (KCB). The approval was granted in accordance with Section 13 (1) (e) of the Banking Act.

This follows KCB’s declaration of its intention to acquire a 100 per cent stake in NBK through a share swap deal in April. The deal comprised of swapping 10 ordinary NBK shares for 1 ordinary share of KCB.

KCB had recently disclosed that it has received acceptances in respect of 262.97 million shares which is equivalent to 77.62 percent of NBK’s total of 338.8 million issued shares. This is a clear indication that the government, which controls 70.6 percent of the lender through the Treasury’s 22.5 percent shareholding and National Social Security Fund’s 48.1 percent stake, has backed the sale.

Having achieved over 75 per cent acceptance, KCB has already hit the minimum threshold required to declare the offer a success and trigger the conversion, which would in turn push the acceptance level above the 90 percent mark. This gives the bank legal powers to compulsorily buy out any dissenting NBK shareholders. KCB expects to list the additional shares through which it is executing a swap for NBK’s equity on September 30.

KCB is expected to announce the offer results on September 13, while the swapped shares will be credited into the trading accounts of NBK shareholders on September 27.

The acquisition is part of KCB’s ongoing strategy to explore opportunities for new growth while investing in and maximising returns from existing businesses.