3rd June, 2011
South Africaâ€™s FirstRand, the countryâ€™s second-largest banking group, said it had dropped acquisition talks with Nigeriaâ€™s Sterling Bank after failing to agree on terms for the deal.
FirstRand said in a statement on Friday it had terminated talks to acquire a majority stake in Sterling Bank, which has about 99 branches in Africaâ€™s most populous nation.
â€œThe parties have been unable to agree mutually acceptable terms,â€ the South African bank said.
South African lenders are keen to expand in fast-growing Nigeria, although the process so far has had plenty of hurdles. Nigeria in 2009 injected $4 billion into nine lenders deemed by auditors to have become so weakly capitalised that they posed a threat to the entire countryâ€™s banking system.
Sterling Bank, which has a market value of around $177 million, was one of the lenders that passed the 2009 special audit.
FirstRand, which has said it was looking to invest â€œmeaningful amounts of capitalâ€ in oil-rich Nigeria, said it still believed the country would be a key market for its Africa expansion strategy.
Shares of FirstRand were down 1.6 percent at 1056 GMT, while shares of Sterling Bank were little changed.