Capitec to buy Mercantile Bank for R3.2 billion
It beats Nedbank, Grindrod Bank and a consortium in its bid for the bank.
Capitec Bank said its offer to buy Mercantile Bank for R3.2 billion has been approved, which will see the microlender enter the small- to medium-sized enterprise financing industry.
Capitec beat Nedbank, and two consortiums — the Public Investment Corporation and microlender and microinsurer Bayport Financial Services, and Grindrod Bank and Arise — in emerging as the winning bidder for Mercantile Bank.
Capitec announced on Thursday that after it made a non-binding offer to purchase Mercantile Bank in June 2018, its offer has been accepted by the company.
The purchase price of Mercantile Bank will be paid from capital and cash reserves, Capitec said.
“The board of Capitec Bank believes there are many opportunities in the market to serve small-to-medium enterprises and owner-managed businesses better, and the bank has commenced with a strategy to develop infrastructure to facilitate same,” Capitec said in a statement.
“The acquisition of Mercantile will obviate the need to reinvent and create new systems and processes from scratch and thus fast track the bank’s objective to expand its focus to a broader bank strategy.”
Mercantile was delisted and became a wholly owned subsidiary of Portuguese bank Caixa in 2012. Its core business offer is business banking for small- to medium-sized enterprises and entrepreneurs.
The bank was offered for sale by Caixa because it is divesting from non-core operations outside of Portugal as part of its recapitalisation plan.