Aug. 4 (Bloomberg) -- BNP Paribas SA, France’s largest bank, agreed to buy a 60 percent stake in Cadiz Holdings Ltd.’s securities unit for 150 million rand ($22 million) to expand in South Africa.
The combined unit will provide clients with cash management, derivatives research and brokerage services, Paris-based BNP Paribas said in a statement today. The transaction is expected to close in the fourth quarter, the lender said.
“We’ve been struggling in the last few years to retain market share,” Ram Barkai, Cadiz’s chief executive officer, said in a telephone interview from Cape Town today. “Some firms open offices in London or Hong Kong but we thought that was too expensive and too risky. We’ve been working on finding a partner for the past two years.”
Cadiz Securities, which makes up almost 50 percent of Cadiz annual profit, has faced increasing competition as international firms from Renaissance Capital to Religare Capital have entered the South African market. With growth in many African nations forecast to outstrip that in developed countries, financial firms are seeking to profit from that expansion.
“The deal demonstrates both a commitment to our strategy of developing an offer in emerging markets, and our growth ambitions in derivatives research and brokerage,” Eric Deudon, global head of emerging markets for BNP Paribas, said in the statement.
Cadiz rose 5 cents, or 1.8 percent, to 2.85 rand as of 9:37 a.m. in Johannesburg trading while BNP Paribas added 2.1 percent to 42.69 euros in Paris.
To contact the reporter on this story: Renee Bonorchis in Johannesburg at firstname.lastname@example.org