Naspers (NPSNY.US), the listed company with the highest market capitalization in South Africa, and its Amsterdam-listed subsidiary Prosus NV SPNSRD (PROSY.US) said today that they have completed a deal that established a cross-ownership structure and transferred the majority of their international assets to Amsterdam.

Bob van Dijk, CEO of Prosus and Naspers Group, said the deal has been ongoing since May and he is happy to have achieved such results.

He said in a statement: “This deal expands the size of Prosus' free-circulating shares and more than doubles its holdings in the group's global consumer internet portfolio. It will also help to rebalance Naspers' excessive weight on the Johannesburg Stock Exchange.”

According to the unconditional deal announced last week, Prosus acquired 45% of Naspers's shares, bringing its total shareholding ratio in Naspers to 49%.

Under a cross-ownership arrangement, Naspers owns 57% of Prosus's shares and will continue to have voting control. The two companies share a board of directors.

After the transaction was completed, Prosus owned financial interest in approximately 60% of the international assets of the two companies, including Tencent's (00700) shares worth $167 billion held by the two companies.

The logic behind the swap deal is that moving some of the assets of the two companies out of South Africa may increase their valuations. Compared with the nominal value of the underlying assets held (including Tencent shares), the stock prices of both companies were greatly discounted. Executives believe that one reason is that Naspers dominates the Johannesburg stock index.

In 2019, Naspers listed Prosus for the same reason, but the value of the underlying asset continued to grow.