Johannesburg — Apart from the larger slice, how would HSBC's transaction be different from the ICBC and Barclays deals?

WHAT South African game enthusiasts know about civets is that they are small, shy, nocturnal cat-like animals and that they are a rare find on a game drive. Even to game- watching aficionados, it may be something of a surprise that civets produce a musk that is highly valued as a fragrance.

The good news is that in the eyes of the world, SA is one of the "Civets", a new acronym that has been vying to take over from where the "Bric" concept left off. Civets, the acronym that is, are somewhat like the animal: relatively small, a bit shy, adept but not outstanding, and sweet-smelling -- in the view of some investors at least.

The "Brics" everybody knows : Brazil, Russia, India and China. They are the kings of the jungle as we know it. "Civets" is a less well- known acronym: they are Colombia, Indonesia, Vietnam, Egypt, Turkey and SA.

In April this year, HSBC CEO Michael Geoghegan made reference to the Civets, saying they would be the ones to watch in the next decade, taking over from the Brics. "Each has a very bright future," he said of the Civets in a Reuters interview . "Each has large, young, growing population. Each has a diverse and dynamic economy. And each, in relative terms, is politically stable. Within three years, for the first time, the economic firepower of emerging markets will overtake the developed world, measured by purchasing power parity. It's a defining moment."

The interview followed a speech Geoghegan made to Chatham House, the venue of many foreign affairs discussions in London, where he expanded on his views on why SA should be included in the group.

"SA because, again, an interesting country. High levels of education compared to the rest of Africa. A place that has had unique challenges, but I believe ultimately cannot fail, will not fail, because there is a will from across the world for it to succeed. Again, very geographically well positioned. High influences from China and India. And again, the gateway for doing business in Africa."

The notion sits at the root of HSBC's strategy, and its manifestation became abundantly apparent yesterday with the announcement of an exclusive period of takeover talks with Nedbank , SA's fourth- largest bank by assets.

HSBC is also rumoured, not surprisingly, to be interested in buying a Turkish bank.

The possibility that Old Mutual might decide to sell its 50% stake in Nedbank has been a proverbial worst-kept secret on the market. Nedbank's share price is up about 12% over this year, compared with the others, which are about even.

Yet the announcement yesterday and the weekend press contained two surprises; one was that HSBC was seeking a 70% stake, and the other was perhaps that HSBC was the bidder and not Standard Chartered, which has now twice been pipped at the post.

The prospect of a bid happens at a tricky time for the government. The previous two investments by foreign banks were conditionally ratified by bank regulators, but various commentators, including former Reserve Bank governor Tito Mboweni , said "no more".

HSBC's prospective bid would be the third involving a big-four bank and would mean conceding that the sector will be, to a large extent, foreign-controlled.

That cannot be good, though once we all believed that having a large foreign owner would be a stabilising factor.

After the financial crisis, it's abundantly clear that size and a First World base is not only not a stabilising factor, but it could even be a destabilising factor.

Global banks such as HSBC, however, emerged from the financial crisis relatively unscathed. But in general, emerging market banks have performed much better.

Not only that, but the atmosphere in SA is a bit grumpy. Absa was supposed to pioneer Barclays's march into Africa, but it never turned out that way.

The partnership between Industrial and Commercial Bank of China (ICBC) and Standard has borne some fruit, but perhaps less than initially hoped, not helped by the global downturn. Now here comes another salesman promising rubies and pearls.

HSBC and Old Mutual are both extremely coy about their discussions with the government so far on the topic, other than to say they have started.

They emphasise that their talks are still at an early stage. But reading between the lines, it's possible to infer that things have gone further than it may seem.

First, HSBC has been bold enough to put out a specific proportion of Nedbank it wants: 70%. How did that number come about? Presumably HSBC wanted the whole bank, but the government said it wanted Nedbank to remain listed, which means a 20% free float is necessary. Add in the black economic empowerment stake of about 10%, and what you are left with is what HSBC wants.

Apart from the larger slice, how would HSBC's proposed transaction be different from the ICBC and Barclays deals?

One possible difference with the Barclays buyout of Absa lies in culture. Barclays conceived of Absa as not only a good investment in itself but also a Trojan horse, or a frontrunner, in consolidating its position in the rest of Africa.

Why that never happened says a lot about the culture clash that presumably followed the takeover. Absa was unwilling, certainly, to pay a big premium for Barclays's African business, but perhaps also in other ways too. Barclays staff in its existing African business perhaps preferred to keep the British brand. It's a common misconception that Africans look to SA as a kind of saviour. They don't, particularly not in the countries above the equator, which have their own regional, and therefore competing, powerhouses.

ICBC's deal with Standard was a completely different kettle of fish.

It was really more a partnership effort, with Standard using the deal partly for capital-raising purposes. ICBC was looking to extend its network, and was prepared to pay a big premium for that privilege.

This deal, if it comes off, seems as though it will be more conventional. HSBC needs no help in Africa and, even if it did, Nedbank would not be its partner. Nedbank's ally, Ecobank, would probably be better, and what will happen to this alliance is one of the imponderables of this deal.

Mergers work if the culture and the businesses fit. HSBC on a global level and Nedbank locally certainly share some aspects of culture fit; they are both, at least in their current forms, conservative banks.

Nedbank has not been a stellar performer in the local market, but it is the best capitalised of the local banks.

Business complementarity is a bit more complex. There is no real business overlap, so no substantial efficiency gains are possible. What HSBC implicitly argues is that trade finance is the core strategic rationale.

The deal would, however, allow Nedbank to tap into HSBC's global network.

This is undoubtedly true, but bank analysts do, however, say that trade finance is only a tiny part of total revenue of local banks, perhaps 8% including offshoot products such as hedges.

An HSBC spokesman says SA is an increasingly important part of the rapid growth in emerging market trade and investment in an increasingly connected world. "With 30% of exports destined for Asia, and China now its largest trading partner, SA's prospects are brighter than ever."

Perhaps. But HSBC's rationale is based on an animal you normally catch only a quick glimpse of at sunset. We need a clearer sight of the animal to judge it more accurately.

Cohen is contributing editor.