South Africa's Finance Minister Pravin Gordhan has approved the proposed merger of the African operations of British bank Barclays and the Absa Group.
Under the deal, eight Barclays Africa operations will merge with Absa. Gordhan approved the merger on condition that the new entity to be formed, known as Barclays Africa Group, be legally constituted in South Africa.
"This approval follows a previous one in 2005 for Barclays to acquire a majority shareholding in Absa," South Africa's Treasury said in a statement
. "This was the first phase of its restructuring, which was to be followed by this second phase being the current transaction for Barclays to transfer its African operations to Absa.
"The transaction is a testimony to South Africa's attractiveness as a hub for companies to expand into Africa, and Barclays is one of many large international companies that have chosen to base their African operations in South Africa. The proposed transaction will bring benefits to the country, employees and shareholders of the group."
The merger was approved on the recommendation of South Africa's Reserve Bank, the statement issued by the Treasury added.
Absa is buying eight Barclays Africa operations in eight African geographies in a share deal worth R18.3billion.
Barclays acquired a majority shareholding in Absa in 2005.
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