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Staff of Reuters 3 Minutes to Read JOHANNESBURG, South Africa (Reuters) – Standard Bank will pay 10.6 billion rand ($728.75 million) for the remaining shares of Liberty Holdings that it does not already hold, forming a financial giant that will expand across Africa. Customers use an ATM at a Standard Bank branch in Cape Town, South Africa, on March 15, 2016. Mike Hutchings/REUTERS Standard Bank already owns a 54 percent interest in Liberty, an insurance and asset manager whose stock jumped 25% on the news. The move, according to Africa’s largest bank by assets, was a natural step in their partnership and aligned with the bank’s aim of providing a broader range of financial services to its customers across the continent. “This will be a whole that is much greater than the sum of its parts,” said Sim Tshabalala, the company’s CEO. With insurance penetration in African economies at just 17 percent or below, he said the purchase will bring capital efficiency and development potential. The two companies said that the combination would offer them greater size and allow them to tap into each other’s client bases, complementary products, and technology. The transaction, according to Liberty Chief Executive David Munro, will also allow the business to re-enter markets on the continent, something it has already attempted. If the deal goes through, Liberty shareholders will receive 0.5 Standard Bank shares and 25.5 rand in cash for each Liberty share, for a total value of 89.46 rand per share. According to the companies, this represents a 32.6 percent premium over Liberty’s closing price on July 14. By 1300 GMT on Thursday, Standard Bank’s stock had fallen 2.16 percent. Investors may be apprehensive, according to Neelash Hansjee, portfolio manager at investor Old Mutual, because Liberty is a large company with various concerns, such as a lack of clear strategic direction. However, he added that the move solidified the two organizations’ partnership and transformed Standard Bank into a full-fledged provider of banking and insurance services. Standard Bank claimed it has received letters of support from Liberty shareholders who own a total of 41 million shares. (1 rand = 14.5454 cents) Emma Rumney contributed reporting, while Olivia Kumwenda, Emelia Sithole-Matarise, and Jane Merriman edited the piece./nRead More

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