Bahrain-based Arab Banking Corporation (Bank ABC) has entered into an agreement with Lebanon’s Blom Bank to acquire its 99.4 percent stake of its Egyptian unit.
Completion of the acquisition of Blom Bank Egypt is subject to a number of conditions and approvals including regulatory approvals in Bahrain, Egypt and Lebanon, a statement said.
It added that the acquisition is expected to complete in the second quarter of 2021.
The proposed cash consideration to be offered by Bank ABC for 100 percent of Blom Bank Egypt under the acquisition is EGP6.7 billion ($427 million).
The deal comes as 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.
The bank said in the statement that Blom Bank Egypt will contribute to upscale Bank ABC’s Egyptian footprint, part of with Bank ABC’s strategy to be “MENA’s leading international bank”.
The bank added that the acquisition will contribute to repositioning Bank ABC’s Egyptian franchise among the top 20 banks in Egypt, while providing Bank ABC with a “highly profitable franchise with significant future growth potential”.
Bank ABC and Blom Bank Lebanon said they will commence working together to satisfy the conditions required to complete the acquisition.
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.”
Dr Khaled Kawan (left), group CEO of Bank ABC and Saad Azhari, chairman and general manager of Blom Bank Lebanon
Saad Azhari, chairman and general manager of Blom Bank Lebanon, added: “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 percent.”
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.
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