Ecobank Transnational International and Nedbank Limited have signed a $285 million (about N44.2 billion) facility deal that might see the latter acquiring, at least, 20 per cent stake in the Ecobank Group.

The financing, it was gathered, is to support Ecobank’s ongoing corporate development programmes.

Information gleaned from both the joint statement issued by the banks and other sources within the organisations indicate that  “the arrangement provides Nedbank with subscription rights, which it can elect to exercise between 24 and 36 months to become a 20 per cent shareholder in Ecobank.”

Subject to the requisite approvals as well as review of geographical alignment of businesses across the combined footprint and reciprocal board representation of one director each, the arrangement similarly provides for the possibility of Ecobank establishing a reciprocal shareholding in Nedbank.

Both banks had, in 2008, entered into a strategic banking alliance. This transaction, according to Ecobank’s Group Head of Communications, Mr. Nabi Souleymane Quedraogo, therefore, marks a critical step in the consolidation and deepening of the 2008 agreement.

According to Arnold Ekpe, Ecobank Group Chief Executive, “the Ecobank and Nedbank alliance has been extremely successful so far, and as anticipated by the terms of the Alliance Agreement, the two banks have begun to discuss the possibility of integrating more tightly in order to better exploit the obvious synergies in geography, customer base and cultural affinity.  This transaction is an important step in achieving this integration and also provides Nedbank with the opportunity to access the significant African growth opportunity.”

Also, Mike Brown, Nedbank Group Chief Executive Officer said ”deepening the alliance through this transaction is a significant step towards providing a “one-bank” solution to clients, particularly to South African corporate entities increasingly doing business in Africa and achieving our vision of building Africa’s most admired bank”.