A definitive agreement has been signed by BLOM Bank and the Arab Banking Corporation (Bank ABC) that will see the former sell its entire 99.4% stake in its Egypt operations to the latter.
In an announcement by the two sides, the sale will take place subject to its obtaining the necessary approvals from the Central Bank of Egypt (CBE) and its Lebanese counterpart, Banque du Liban. Other regulatory approvals from Egypt and Bahrain are also expected for the deal to go through.
The proposed cash consideration to be offered by Bank ABC for the 100% stake in BLOM Bank Egypt under the transaction is EGP 6.7bn ($427m).
BLOM Bank will sell its stake to Bank ABC by tendering its shares into a mandatory tender offer, which will be launched by the latter to all shareholders with BLOM Bank Egypt. This will take place after obtaining and complying with all mandatory regulatory approvals, including from the CBE and Egypt’s Financial Regulatory Authority (FRA). The closing of the transaction is expected to take place in the first half (H1) of 2021.
Saad Azhari, Chairperson and General Manager of BLOM BANK, said, “This transaction demonstrates our continuous commitment to our stakeholders and dedication to our strategy.”
“It will allow BLOM Bank to comply with the latest regulations issued by Banque du Liban, which stipulate that all Lebanese banks must increase their equity by 20%,” he added, “I would like to take this opportunity to thank our team in BLOM Bank Egypt for their dedication and perseverance that have made our operation in Egypt successful.”
He also thanked the management and transaction team at Bank ABC for their cooperation and professionalism during the entire transaction process, as well as the CI Capital and Baker McKenzie teams for their commitment and dynamism.
Commenting on the transaction, Khaled Kawan, Group CEO of Bank ABC, said, “The acquisition of BLOM Bank Egypt is a unique opportunity for Bank ABC to fulfil its longstanding strategic commitment to inorganically expand its core business, giving us a significantly enhanced platform for future growth, in one of the most attractive markets in the region.”
He also said, “We have an active relationship with our regulators and will be working to secure their approvals to complete the deal as swiftly as possible.”
Kawan noted that Bank ABC is looking forward to working with its new BLOM Bank Egypt team to combine Bank ABC Egypt and BLOM Bank Egypt to create a new powerhouse in the Egyptian banking sector.
BLOM Bank was advised by CI Capital, while Baker McKenzie acted as legal counsel. Bank ABC was advised by HSBC, while Freshfields Bruckhaus Deringer and Zulficar & Partners acted as legal counsel.