Bahrain-based Arab Banking Corporation (Bank ABC) has entered into an agreement with Blom Bank, Lebanon to acquire its 99.4% stake of Blom Bank Egypt for $427 million.
Bank ABC, a leading financial institution in the Middle East, is expected to to complete the acquisition in the second quarter (Q2) of 2021.
The acquisition is subject to regulations in Bahrain, Egypt and Lebanon.
A statement from Bank ABC said the acquisition is expected to “reposition Bank ABC’s Egyptian franchise amongst the top 20 banks in Egypt, delivering significantly greater scale and a more efficient platform; 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; 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; 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.”
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.
Dr 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.
“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. 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.”
Saad Azhari, Chairman and General Manager of Blom Bank Lebanon, commented: “This transaction demonstrates our continuous commitment to our stakeholders and dedication to our strategy. 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,” he added.