African Bank Buy Grindrod For Instant Access To Business Market
African Bank just spent R1.5 Billion to acquire Grindrod Bank.
Grindrod Bank (Grindrod Financial Holdings Limited) was set up as a boutique merchant bank back in 1994 and has shown steady growth. Over the years they have been approached by several parties who have been interested in buying into or buying out the bank.
Since Grindrod Bank already has many existing corporate and retail clients and this is an area where African Bank feel it can expand, the purchase is a quick way for African Bank to expand into this market.
A Quick Way To Speed Things Along
Recently African Bank officially set up a business banking division and made several key staff appointments in anticipation of its growth into the business banking sector. It has been an area they have been eying over the years. The question has always been one of timing and funding.
Rather than have to start from scratch African Bank can now build on the existing Grindrod Bank clientele and infrastructure to expand its share of this part of the market.
Everyone Seems Pretty Happy
Since Grindrod Bank is valued at nearly R1.7 Billion African Bank were pretty happy with their deal. They get more than they paid for and instant access to the existing infrastructure.
Grindrod is also happy as they will now be able to shift focus into the freight services side of their business. They can also use the funds to pay off debts, make investments etc.
Grindrod shareholders were also pretty happy as news of the purchase pushed up the value of their shares sudeenly.