Capitec wins bid for Mercantile. Buying Mercantile would remove the need to reinvent and create new systems and

processes from scratch, fast-tracking its broader bank strategy.

Capitec has won its 3.2 rand billion bid to buy Mercantile Bank from Portuguese

lender Caixa Geral de Depositos as it enters business banking.

Capitec was one of a number of interested parties to submit offers to the

Portuguese state-owned bank. Mercantile confirmed it had received a total of

18 offers, including Capitec, Nedbank and a consortium led by the Public

Investment Corporation. When Capitec indicated it was interested in making an

offer in June, the price tag was speculated to be in the region of R5 billion.

Caixa put Mercantile up for sale as it divested of non-core operations in

order to meet European capital requirements.

Capitec said it made the offer after a detailed due diligence on Mercantile's

operations and that the final price would be adjusted for any change in its

net asset value from 30 April 2018 to the completion date of the transaction.

It will fund the deal from capital and cash reserves.

It said there were many opportunities in the market to serve small-to-medium

enterprises and owner-managed businesses better. Buying Mercantile would

remove the need to reinvent and create new systems and processes from scratch,

fast-tracking its broader bank strategy. Mercantile's customers include about

12 000 entrepreneurs.

Mercantile's core business offer is business banking for small- to medium-

sized enterprises and entrepreneurs and it is therefore well positioned to

align with Capitec Bank's business banking strategy," Capitec said.

Capitec's shares ended trade 0.9% lower at 1,090 rand.

> Capitec Bank to enter business banking space with the acquisition of

Mercantile Bank. pic.twitter.com/hIJxusB2vq

>

> -- Property Guy (@Thakhani_R) November 22, 2018

> This is huge!!! Capitec Bank has bought Mercantile bank. Meaning it has

formally entered the business banking arena.

>

> Cant wait to see what they plan on doing with Mercantile Bank. They have

BEEN disrupting the banking game.

>

> -- Visoni (@visoni) November 22, 2018