UPDATE 2-HSBC to buy up to 70 pct of S.Africa’s Nedbank

* Old Mutual, HSBC in exclusive talks on Nedbank stake

* HSBC could acquire up to 70 pct of Nedbank, worth $6.8 bln

* Deal would give HSBC better foothold in Africa

* Nedbank, Old Mutual shares climb; HSBC steady

(Changes dateline, adds details, analyst comment, share prices)

By David Dolan and Kelvin Soh

JOHANNESBURG/HONG KONG, Aug 23 (BestGrowthStock) – HSBC will buy up
to 70 percent of South Africa’s Nedbank (NEDJ.J: ), in a potential
$6.8 billion deal that would give Europe’s largest lender a
bigger presence in Africa’s top economy and a gateway to the
fast-growing continent.

HSBC (0005.HK: ) (HSBA.L: ) and Anglo-South African insurer Old
Mutual (OML.L: ) (OMLJ.J: ), which owns a controlling stake in
Nedbank, said in separate statements on Monday they were in
exclusive talks about the deal.

Nedbank shares opened 6.75 percent higher at 138 rand, HSBC
shares in London opened 0.3 percent firmer and Old Mutual’s
London-listed shares started 4.2 percent higher.

Old Mutual said HSBC could acquire up to 70 percent of South
Africa’s fourth-largest bank, a deal that could be worth about
49.9 billion rand ($6.8 billion), given Nedbank’s current market

It was not immediately clear whether HSBC would get the
necessary clearance from South Africa’s regulators to buy a
stake in the bank.

South Africa’s head of bank regulation, Errol Kruger, told
Reuters on Monday it was still too early to comment on the deal.

“They still have to submit all the applications they need to
go through and then we’ll need to apply our minds to it,” he
said in a telephone interview.

South Africa’s rand rose slightly in early trade on Monday,
helped by the news of the potential deal. The rand (ZAR=D3: )
firmed to 7.29 against the dollar at 0642 GMT, from 7.32 before
the news.

For HSBC, which has lagged rival Standard Chartered (STAN.L: )
in Africa, the acquisition would bulk up its presence as more of
its Chinese customers are looking to do deals on the
resource-rich continent.

“This is the right thing for HSBC to do if it wants to focus
on emerging markets,” said Dominic Chan, an analyst at BNP
Paribas in Hong Kong.

“Trade between Africa and China has been growing very
rapidly, and HSBC doesn’t have the same presence there as
Standard Chartered, which makes this buy especially crucial if
it wants to continue expanding there.”

Media reports had previously said that Standard Chartered
may bid for Nedbank.

For Old Mutual, the deal would help it in a strategic
overhaul to slim down its complicated structure.

Nedbank, which said in a statement that HSBC was an
attractive international banking partner, has been struggling
with a money-losing retail unit.

The bank this month posted flat first-half earnings and said
it would struggle to meet its medium-term forecasts.

Shares of Nedbank are up about 5.7 percent this year, helped
by speculation that it would be the target of a bid.
(Additional reporting by Tiisetso Motsoeneng in JOHANNESBURG;
Editing by Marius Bosch and Mark Potter)

UPDATE 2-HSBC to buy up to 70 pct of S.Africa’s Nedbank