HSBC will buy up to 70 percent of South Africa’s Nedbank, in a potential $6.8bn deal that would give Europe’s largest lender a bigger presence in Africa’s top economy and a gateway to the fast-growing continent.

HSBC and Anglo-South African insurer Old Mutual, which owns a controlling stake in Nedbank, said in separate statements that they were in exclusive talks about the deal.

Old Mutual said HSBC could acquire up to 70 percent of South Africa’s fourth-largest bank, a deal that could be worth about 49.9 billion rand ($6.8bn), given Nedbank’s current market value.

It was not immediately clear whether HSBC would get the necessary clearance from South Africa’s regulators to buy a stake in the bank.

South Africa’s head of bank regulation, Errol Kruger, told reporters it was still too early to comment on the deal.

“They still have to submit all the applications they need to go through and then we’ll need to apply our minds to it,” he said in a telephone interview.

For HSBC, which has lagged rival Standard Chartered in Africa, the acquisition would bulk up its presence as more of its Chinese customers are looking to do deals on the resource-rich continent.

“This is the right thing for HSBC to do if it wants to focus on emerging markets,” said Dominic Chan, an analyst at BNP Paribas in Hong Kong.

“Trade between Africa and China has been growing very rapidly, and HSBC doesn’t have the same presence there as Standard Chartered, which makes this buy especially crucial if it wants to continue expanding there.”

Media reports had previously said that Standard Chartered may bid for Nedbank.

For Old Mutual, the deal would help it in a strategic overhaul to slim down its complicated structure.

Nedbank, which said in a statement that HSBC was an attractive international banking partner, has been struggling with a money-losing retail unit.

The bank has posted flat first-half earnings and said it would struggle to meet its medium-term forecasts.

Shares of Nedbank are up about 5.7 percent this year, helped by speculation that it would be the target of a bid.