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Barclay buys majority of South African bank

May 9, 2005 at 4:08 PM

LONDON, May 9 (UPI) -- South African Finance Minister Trevor Manuel agreed Monday to allow Barclay's Bank to acquire a majority stake in South Africa's biggest retail lender, Absa.

Barclays, the United Kingdom's third largest bank, agreed to pay the Johannesburg-based Abas Group Ltd. shareholders 82.5 rand per share or $5.5 billion, the company said. The deal surpasses Barclay's original offer of 80.8 rand ($5.3 billion) a share when talks began in September.

"This transaction accelerates our strategy to internationalize Barclays earnings and increase exposure to selected high-growth, well run markets," said John Varley, group chief executive of Barclays.

Under the agreement, the U.K.-based bank will own 60 percent of Absa, making Barclays the largest foreign direct investment banker in South Africa. The bank received written approval from 63 percent of Abas stakeholders.