Announcement re Absa

RNS Number:0652W
Barclays PLC
22 December 2005


ABSA GROUP LIMITED                                    BARCLAYS BANK PLC
Incorporated in the Republic of South Africa)         (Registered in England)
(Registration No. 1986/003934/06)                     (Registration No. 1026167)
JSE Code: ASA                                         ("Barclays")
Issuer Code: AMAG
ISIN Code: ZAE000067237
("Absa" or "the Company")

ACQUISITION OF THE BRANCH BUSINESS OF BARCLAYS BANK PLC IN SOUTH AFRICA BY ABSA
BANK LIMITED

1. Introduction

Further to the transaction contemplated in the circular to Absa shareholders
dated 20 May 2005, and the acquisition by Barclays of Absa ordinary shares in
the open market, Barclays now holds approximately 56% of the issued Absa
ordinary shares.

Shareholders are advised that Absa Bank Limited, a wholly owned subsidiary of
Absa, has entered into agreements with Barclays for the acquisition as a going
concern of the Barclays South African Branch Business (the "Business")
comprising the Barclays Capital South Africa business and the Corporate and
Business Banking business as carried on by the South African branch of Barclays,
together with related assets and liabilities (the "Acquisition").

2. Salient Terms of the Acquisition

2.1 Purchase Consideration

The purchase consideration in respect of the Acquisition is R578 million which
is based on the net asset value of the Business at 31 August 2005, and which
will be adjusted to reflect the net asset value of the Business at the effective
date. The purchase consideration will be settled in cash.

2.2 Transaction Structure

The transfer of assets and liabilities in respect of South African law governed
assets and contracts will take place by operation of section 54 of the Banks
Act, 1990. The transfer of other assets and contracts not governed by South
African law has been dealt with on a contractual basis.

2.3 Effective Date

The effective date of the Acquisition is the first day of the calendar month
following fulfilment of the suspensive conditions as set out in paragraph 8
below which is expected to be on 1st January 2006.

2.4 Warranties and indemnities

The acquisition agreement contains warranties and indemnities which are normal
for a transaction of this nature.

3. Rationale for the Transaction

As previously announced to shareholders, both the Absa and Barclays Boards
support the vision of creating the pre-eminent bank in Africa and have agreed in
principle, subject to regulatory and such other approvals as are required, to
integrate on an arm's length basis Barclays South Africa and the other Barclays
Africa Sub-Saharan businesses into Absa. The Acquisition of the Business is the
first such integration transaction.

4. Details of the Business Acquired

The Corporate and Business Banking portion of the Business focuses on promoting
the product range of debt originated in South Africa, specialised property and
project finance, as well as transactional banking to corporate and business
clients. Barclays Capital South Africa is part of Barclays Capital, the
investment banking division of Barclays and it provides a full range of
financing, investment and risk management products to its clients. The Business
has total assets of approximately R12,9 billion and employs 170 employees, who
will be transferring to Absa Bank.

5. Pro Forma Financial Effects

The pro forma financial effects of the Acquisition on the financial results of
Absa for the six month period ended 30 September 2005 in respect of earnings and
headline earnings per share are positive but not significant (being less than 3%
in accordance with the definition of the Listings Requirements of the JSE
Limited ("JSE")) and has no effect in the case of net asset value and net
tangible asset value per share.

6. Related Party Transaction and Fair and Reasonable Opinion in terms
of the JSE Limited's Listing Requirements

The Acquisition constitutes a "small related party transaction" in terms of
paragraph 10.7 of the Listings Requirements of the JSE due to Barclays being the
controlling shareholder of Absa. In terms of the Listings Requirements of the
JSE, a related party transaction requires that an independent professional
expert, acceptable to the JSE, must conclude that the terms and conditions of
the proposed Acquisition from Barclays are fair and reasonable as far as the
shareholders of Absa are concerned. Accordingly, the Absa Board appointed NM
Rothschild and Sons (South Africa) (Proprietary) Limited ("Rothschild") to
review the terms and conditions of the Acquisition and report as to the fairness
and reasonableness of the terms and conditions of the Acquisition.

Rothschild, after considering the information made available by Absa and
Barclays, and after discussions with the respective management teams, is of the
opinion that the terms and conditions of the Acquisition are fair and reasonable
to Absa shareholders.

Rothschild's opinion is available for inspection during office hours at the
registered address of Absa, namely 3rd Floor, Absa Towers East, 170 Main Street,
Johannesburg, 2001 in terms of the Listings Requirements of the JSE for a period
of 28 days from the date of this announcement.

7. Opinion of the Absa Board

The Absa Board (excluding the Barclays nominee directors) has considered, inter
alia, the recommendation of a Board Committee consisting of independent
directors, the opinion from Rothschild and the commercial implications of the
Acquisition in arriving at its opinion in respect of the terms and conditions of
the Acquisition. The Absa Board is of the opinion that the terms and conditions
of the Acquisition are fair and reasonable to and in the interests of Absa
shareholders as a whole.

8. Suspensive Conditions

The Acquisition is subject to the execution of all related documentation and
receipt of minor related approvals by 31 January 2006, or such later date as may
be agreed by the parties.

9. Wealth Management

Linked to the Acquisition, the small Barclays International Personal and Premier
sales team in South Africa will transfer to Absa Private Bank, a division of
Absa Bank.

10. Forward Looking Statements

This announcement contains certain forward-looking statements within the meaning
of Section 21E of the US Securities Exchange Act of 1934, as amended and Section
27A of the US Securities Act 1933, as amended, with respect to certain of the
Barclays/Absa plans and its current goals and expectations relating to the
potential transaction described above. By their nature, forward-looking
statements involve risk and uncertainty because they relate to future events and
circumstances, including, but not limited to, domestic and global economic and
business conditions, market related risks such as changes in interest rates and
exchange rates, the policies and actions of governmental and regulatory
authorities, changes in legislation and the impact of competition, a number of
which are beyond Barclays/Absa control. As a result, actual future results may
differ materially from the plans, goals and expectations set forth in the
forward-looking statements.

22 December 2005

Merchant bank, transaction advisor and joint-sponsor to Absa
Absa Corporate and Merchant Bank

Lead sponsor to Absa
Merrill Lynch South Africa (Proprietary) Limited

Legal advisors to Absa
Webber Wentzel Bowens
Linklaters

Due Diligence Advisors to Absa
KPMG

Independent expert to Absa
NM Rothschild and Sons (South Africa) (Proprietary) Limited

Financial advisor to Barclays
Barclays Capital

Legal advisors to Barclays
Deneys Reitz Inc.
Clifford Chance


For further information, please contact:

Barclays PLC
Investor Relations                                          Media Relations
James S Johnson/Anne Ramsay                                 Chris Tucker
[phone]/8171                                   [phone]




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