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DealMakers - 2023 Annual

BEE Deal of the Year

Absa’s eKhaya B-BBEE transaction

In March 2023, Absa announced the implementation of an R11,2bnBroad-Based Black Economic Empowerment deal. The transaction took over five years to structure and implement, and represents the final element of Absa’s transformation following Barclays’ exit as a shareholder in 2017.


In naming the scheme eKhaya, meaning ‘home’ in isiZulu, Absa captured the opportunity that has been created for each colleague to own a portion of the Absa home.

The transaction entails the issuance of 5,5% newly issued shares, and ultimately amounts to a 7%  shareholding

 allocated to staff and community beneficiaries as follows:

  •  A 4% evergreen Corporate Social Investment (CSI) component, which will benefit primary black beneficiaries of selected education and youth employability programmes in South Africa. The trust will receive an annual dividend equal to 25%of the dividend per share paid by Absa Group. The beneficiaries will be reviewed annually.

  •  A vesting staff element, which benefits all eligible permanent employees

  • All of Absa’s approximately 26 000 eligible employees in South Africa, irrespective of race, background or seniority, will participate in a 3% equity settled staff scheme. Black employees will receive an additional 20%allocation - reflecting just over 82% of the value of the staff trust. All staff in the 3%component will receive an annual dividend equal to 25% of the dividend per share paid by Absa Group. The shares will vest after a five-year period, with eligible employees taking ownership of the shares, net of applicable taxes and any outstanding funding costs

  • Staff employed by Absa’s subsidiaries in all other African countries and international operations, of which there are 14, will participate equally in a cash-equivalent staff scheme, equivalent to about 1% of the Absa Group’s market capitalisation. The initiative is based on cash rather than Absa shares, due to regulatory and taxation complexities related to cross-border shareholding.


The 7% or 62,6 million Absa shares include the existing 16 million held by the Staff Trust via a special purpose vehicle, Newshelf1405. A portion of these shares were received from the Barclays separation, and 46,6 million new Absa ordinary shares were issued to the SPV at an issue price of R178,11, valued at R8,3bn.The transaction was funded by existing cash resources (R330m), a capital contribution by Absa Bank and preference share funding of R4,5bn at 72% of prime, and mezzanine funding of R1,7bn at90% of prime. Given the low initial gearing of 55% loan-to-value, the transaction has significant potential to achieve a positive outcome for its participants.

The transaction will directly impact c.35,000 people employed by Absa, and impact a broader constituency across South Africa through the CSI Trust. The transaction is expected to exceed the 25% threshold set out in the Financial Sector Charter.

The group’s B-BBEE deal became effective on 1 September and will reduce 2023 earnings by 1%.

Local Advisers

Absa CIB, Oxford Partners, J.P. Morgan, ENS, PwC and KPMG.


Comment from the Independent Panel: 

This transaction is noteworthy for its scale and likely impact on 35 000 Absa employees, primarily in South Africa, but also across the continent. The panel noted the evergreen nature of the CSI Trust and the relatively low gearing in the structure, which should allow benefits to flow to staff and beneficiaries.

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BEE Pick of the best in alphabetical order

Heineken Beverages bottles success with their Bokamoso transaction

Announced in July, almost 5 000 employees will jointly own a 6% stake in the company through an employee share ownership plan (ESOP) called the Bokamoso Workers Trust, named after the Sesotho word for ‘future’. The scheme is one of the conditions of ownership imposed on the Dutch brewer by South Africa’s competition authorities in 2021, when Heineken International acquired Distell from minority shareholders. The merger only received approval from local competition authorities in early 2023.

The new, merged holding company entity is called Heineken Beverages, while the underlying South African operations are known as Heineken Beverages SA (HBSA).Heineken Beverages, a drinks producer built on the legacy of three great companies –Heineken, Distell and Namibian Breweries Limited – brings together over 100 years of global experience, innovation and excellence across 70iconic brands.

Local Advisers

Rand Merchant Bank and Webber Wentzel

Distell’s previous empowerment deal saw the Distell Development Trust (established in 2005) hold a 15% interest in the group’s local operations. This stake was rolled into the larger Heineken Beverages SA that was created through the merger, diluting the stake to an overall interest of 9%. The announced BEE scheme will form part of the BEE structure of HBSA, and results in total BEE ownership of15% at the HBSA level.

The key features of the ESOP transaction are:

  • The evergreen (perpetual) scheme model that has no vesting period and provides equal participation to all employees 

  • The scheme is for the continued benefit of current and future full-time South African employees, and fixed-term contractors within the South African operations.

  • No upfront capital contributions are required from eligible employees.

  •  The trickle dividend of 55% is higher than the trickle dividends received under traditional finite schemes. The balance of the dividend will be applied to the notional vendor 

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financing (NVF) which, once repaid, will entitle the beneficiaries to100% of the dividends. 


The evergreen nature of the ESOP enables dividends to flow to beneficiaries both before and after the repayment of the NVF, and introduces indirect shareholding, voting rights and board representation for the beneficiaries.

Comment from the Independent Panel: The panel liked the high trickle dividend flowing to employees, and the board representation for the ESOP beneficiaries. This is a well-structured and robust BEE transaction, and the clear commitment of a global multinational to BEE is commended.

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