Manama, Arab Banking Corporation (B.S.C.) (“Bank ABC”) announced that it has entered into an agreement with Blom Bank S.A.L. (“Blom Bank Lebanon”) to acquire its 99.4% stake of Blom Bank Egypt S.A.E. (“Blom Bank Egypt”).
Completion of the acquisition is subject to a number of conditions and approvals including regulatory approvals in Bahrain, Egypt and Lebanon. The acquisition is expected to complete in Q2 2021, and a further announcement will be made at that time.
The proposed cash consideration to be offered by Bank ABC for 100% of Blom Bank Egypt under the acquisition is EGP 6,700 million.
Bank ABC undertakes a significant level of business in Egypt, which is a key strategic market for ABC, having established its presence through the acquisition of Egypt Arab African Bank in 1999. It currently operates through Bank ABC in Egypt, which is spread across 27 branches in the country. Blom Bank Egypt will contribute to upscale Bank ABC’s Egyptian footprint, which is fully aligned with Bank ABC’s strategy ‘to be MENA’s leading international bank’.
The acquisition will contribute to reposition Bank ABC’s Egyptian franchise amongst the top 20 banks in Egypt, delivering significantly greater scale and a more efficient platform.
It will provide the Bank ABC Group with a highly profitable franchise with significant future growth potential in one of the most fundamentally attractive markets in MENA, and build new capabilities, particularly in Retail, Corporate and SME lending leveraging Bank ABC’s strong digital and mobile banking capabilities and its Group centres of excellence.
The agreement will provide customers with an enhanced product offering, with a more capable and expansive branch network through the addition of 41 branches, and help facilitate greater international connectivity for the enhanced customer base and a stronger platform for access to Egypt for Bank ABC’s broader client base.
Bank ABC and Blom Bank Lebanon will commence working together to satisfy the conditions required to complete the acquisition, including obtaining the relevant regulatory approvals and will continue to carry out their activities independently in Egypt until all regulatory approvals are obtained.
HSBC Bank Middle East is acting as the sole financial advisor to Bank ABC, with Freshfields Bruckhaus Deringer and Zulficar & Partners acting as legal advisors. Blom Bank Lebanon was advised by CI Capital, while Baker McKenzie acted as legal counsel.
Bank ABC will make further announcements as and when material developments occur in relation to the acquisition.
“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,”Dr. Khaled Kawan, Group CEO of Bank ABC 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. We will then look forward to working with our new Blom Bank Egypt team to combine Bank ABC Egypt and Blom Bank Egypt thereby creating a new powerhouse in the Egyptian banking sector,” he added.
“We also thank the management teams of Blom Bank Lebanon, Blom Bank Egypt and their advisors for the seamless execution process that has led to this agreement.”
“This transaction demonstrates our continuous commitment to our stakeholders and dedication to our strategy,”Saad Azhari, Chairman and General Manager of Blom Bank Lebanon said.
“It will allow Blom Bank Lebanon to comply with the latest regulations issued by the Central Bank of Lebanon, which stipulate that all Lebanese banks must increase their equity by 20%. 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. I would also like to thank the management and transaction team at Bank ABC for their cooperation and professionalism during the entire transaction process as well as the CI Capital Investment Banking and Baker McKenzie teams for their commitment and dynamism.”
Source: Bahrain News Agency