The boards of South African business FirstRand Group and Aldermore Bank have agreed a sale on a cash offer of 313p per share, valuing Aldermore at £1.1bn (€1.24bn).

The deal is conditional on a shareholder meeting vote and regulatory approvals going through, although private equity firm Anacap Partners, who are minority shareholders with 25.1% of shares, has already given its approval ahead of the general meeting.

Under the deal, motor finance provider MotoNovo, owned by FirstRand, will be integrated within Aldermore, allowing it to use Aldermore’s funding platform in the UK.

Explaining the reasons for the deal, FirstRand Group said the acquisition of Aldermore would allow it to diversify its product offerings in the UK using the strengths that Aldermore had in the SME, mortgage and savings markets.

FirstRand said the integration would allow capacity currently allocated to MotoNovo from the FirstRand Group’s domestic balance sheet to support FirstRand’s expansion in South Africa.

The South African lender said that it had already seen the potential to broaden the business model of the combined motor finance and specialist lending platforms, through cross-selling and developing ‘further financial service offerings’.

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Aldermore will join the other businesses in the FirstRand group: First National Bank, Rand Merchant Bank, WesBank and Ashburton Investments.

Johan Burger, chief executive officer of FirstRand said that the deal had progressed in spite of the uncertainty caused by Brexit. “In making this offer FirstRand carefully considered how current and potential macroeconomic future scenarios in the UK could impact the broader business,” said Burger.

“We are very comfortable that the financial impact of this transaction is supportive of FirstRand’s previous guidance to shareholders on growth, returns, capital position and dividend policy.”

Phillip Monks, chief executive officer of Aldermore, said: “We set out to provide a real alternative that would challenge the status quo in banking and it’s been a remarkable journey. There are now 1,000 colleagues serving over 230,000 customers and together we have built one of the UK’s leading specialist banks, with lending to small businesses and individuals totalling £8.4 billion at the end of the third quarter.

“The Offer reflects our strong track record of delivery and FirstRand’s confidence in Aldermore to continue delivering on its sustainable growth strategy. Through its own portfolio of leading financial services franchises, the FirstRand Group has demonstrated its ability to successfully integrate entrepreneurial businesses and we believe there is a strong strategic and cultural fit for customers, colleagues and wider stakeholders. With the backing of FirstRand Group’s considerable resources and wider capabilities, we will be able to accelerate the delivery of our strategy and further expand the products and services we offer customers. Our vision has always been to bring more competition to UK banking, and the support of the FirstRand Group will enable us to continue to do just that.”