HSBC ends talks about gaining control of Nedbank

AP News
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Posted: Oct 15, 2010 6:08 AM
HSBC ends talks about gaining control of Nedbank

British bank HSBC said Friday it has ended talks with Old Mutual over buying control of South Africa's Nedbank, a deal that would have been potentially worth up to $6.8 billion.

HSBC Holdings PLC and Old Mutual PLC announced the end of the discussions, which were over a 70 percent stake and had been first revealed on Aug. 23, in brief announcements to the London Stock Exchange.

"The reasons for HSBC's withdrawal were not disclosed to Old Mutual, but were not, as far as Old Mutual is aware, related to any adverse findings during HSBC's due diligence," Old Mutual said.

"Old Mutual will evaluate its other options concerning the shareholding in Nedbank Group Ltd. and make further announcements in due course," the company added.

HSBC shares were up 0.7 percent to 666.6 pence and Old Mutual shares were down 6.8 percent to 135.4 pence following the announcement.

Old Mutual had said a sale would help to simplify its business, and that it would have used some of the money to make new investments in South Africa.

Old Mutual was founded in 1845 in South Africa as the Mutual Life Assurance Society of the Cape of Good Hope. It is listed on stock exchanges in London, Johannesburg, Zimbabwe, Malawi and Namibia.

Analysts had said that HSBC could have faced official resistance to acquiring such a large stake in a South African company.