OpenAI appears to be regaining its footing in an iNedbank
South Africa’s Nedbank Group, the country’s fourth-largest bank by assets, is positioning its planned entry into Kenya as an expansion-led strategy rather than a cost-cutting takeover. As part of its proposed acquisition of NCBA Group, Nedbank has formally committed to retaining the Kenyan lender’s entire workforce, a move aimed at calming employee and market concerns that typically accompany large cross-border bank deals in East Africa.
The assurance was disclosed by NCBA in a notice of additional information released on Monday, where the bank confirmed that staff retention formed a core pillar of the transaction. According to the disclosure, NCBA employees are expected to play a strategic role in Nedbank’s broader regional ambitions, a commitment that weighed heavily in the board’s decision to recommend the deal to shareholders.
A Clear Shift From the Usual M&A Playbook
In a sector where mergers often trigger layoffs, branch rationalisation, and system consolidation, Nedbank’s approach stands out. Banking acquisitions in Kenya have historically prioritised efficiency gains, frequently at the expense of jobs. Nedbank, however, appears to be signalling a different intent, one focused on growth, local expertise, and continuity.
The offer or has confirmed that following completion of the proposed transaction, the existing contractual and statutory employment rights of NCBA management and employees will remain in full force, NCBA said in its statement. NCBA management and employees will play an important role in the future development of the enlarged group.
That language suggests Nedbank views NCBA’s human capital not as excess capacity to be trimmed, but as a competitive asset critical to scaling operations across East Africa.
Strengthening a Foothold in East Africa
The staff-retention pledge follows Nedbank’s January 21 announcement of a tender offer to acquire a 66% stake in NCBA, a move that would give the South African lender a significant presence in one of Africa’s most dynamic banking markets.
While the initial offer documents did not explicitly address staffing implications, NCBA chief executive John Gachora later emphasised that preserving operational stability, including the bank’s brand, workforce, and customer relationships, was central to the board’s approval of the transaction.
This emphasis reflects a broader understanding that banking expansion in East Africa requires deep local knowledge, established relationships, and trust elements that are difficult to replicate through aggressive restructuring.
Workforce Growth Underscores the Stakes
Regulatory filings show that NCBA employed 3,712 staff as of December 2024, up from 3,462 a year earlier, underscoring a period of expansion rather than contraction. In previous Kenyan banking mergers, similar workforce sizes have often been followed by job cuts as overlapping branches and systems were consolidated.
By explicitly committing to staff retention, Nedbank is attempting to differentiate this deal from past transactions that sparked anxiety among employees and customers alike.
Governance Structure Signals Continuity
Beyond staffing, the proposed governance framework also points to a continuity-first approach. Under the terms of the deal, NCBA will retain its existing board structure, with Nedbank nominating at least two directors. At the same time, current NCBA shareholders will appoint one representative to Nedbank’s board, creating a degree of reciprocal oversight.
This arrangement suggests that Nedbank is seeking influence without fully dismantling NCBA’s leadership architecture, reinforcing the narrative of partnership rather than absorption.
Deal Valuation and Transaction Structure
Nedbank’s offer places a $7.6 billion valuation on NCBA, with shareholders allowed to tender up to 66% of their holdings on a prorated basis. The transaction is structured as a hybrid settlement: 80% of the consideration will be paid through a share swap, while the remaining 20% will be settled in cash, priced at KES 2,100 ($16.28) per 100 shares.
The structure allows NCBA shareholders to retain exposure to the combined group’s future performance while also receiving a cash component, a balance designed to appeal to both long-term and liquidity-focused investors.
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What This Means for the Region’s Banking Landscape
If completed, the acquisition would mark one of the more significant cross-border banking deals in East Africa in recent years. More importantly, it could set a precedent for how foreign lenders approach regional expansion prioritising stability, local talent, and long-term growth over rapid cost extraction.
For NCBA employees and customers, Nedbank’s assurances offer a degree of certainty in an industry where consolidation often brings disruption. For the wider market, the deal signals a growing confidence among African banks to expand across borders without defaulting to aggressive restructuring.
As regulatory approvals and shareholder votes loom, the transaction is shaping up to be a test case for whether large-scale banking acquisitions in Africa can truly deliver growth without sacrificing jobs in an increasingly competitive AI market. In an internal message to employees, CEO Sam Altman said ChatGPT’s growth rate has climbed back above 10%, marking a notable rebound after months of concern about slowing adoption.
The internal note, reviewed by CNBC, also revealed that OpenAI is preparing to release an updated chat model within days, another signal that the company is accelerating product development to stay ahead of rivals.
