Update HSBC (HBC)

It’s by no means a done deal—nothing is in South Africa these days—but Nedbank, the South African bank majority owned by insurer Old Mutual (OML.L), is HSBC’s (HBC) deal to lose.

HSBC beat out rival Standard Chartered (SCBFF.PK) for the right to hammer out a formal offer to acquire South Africa’s fourth largest bank over the next two months. I think HSBC will pull it off. Old Mutual own 51% of Nedbank and the insurer is a motivated seller because the company is selling assets to pay down debt. HSBC won’t be able to gain 100% of Nedbank’s outstanding shares because South African law reserves a percentage of shares for black investors. But the company should be able to gain the 70% of shares that it has said will let it achieve it strategic goals.

And what are those goals?

First, but not foremost, HSBC wants to gain a foothold in Africa’s largest economy. Read more