Arab Banking Corporation (Bank ABC) today announced the completion of its acquisition of a 99.5% stake in BLOM Bank Egypt S.A.E. (BLOM Bank Egypt), significantly enhancing Bank ABC’s presence in the MENA region, and deepening its roots in the Egyptian market. This announcement follows the successful completion of the Mandatory Tender Offer (MTO), share transfers and the release of the purchase price of $425m to BLOM Bank S.A.L. (BLOM Bank Lebanon) and the minority shareholders that tendered their shares in the MTO. This represents a multiple of 1.37x based on BLOM Bank Egypt’s book value as of March 2021.
Leveraging Bank ABC’s more than 20 years of experience in Egypt and BLOM Bank Egypt’s strong reputation and market presence, Bank ABC aims to expand growth opportunities and strategically increase offerings available for wholesale, corporate, and retail customers alike. Bank ABC Egypt and BLOM Bank Egypt will continue operating as separate entities until the legal merger is completed, which is subject to regulatory approval and expected to conclude in Q1 2022.
The combined entity would more than triple Bank ABC’s market share and take its balance sheet to approximately EGP 60bn on a combined basis. Customers are set to experience expanded service offerings, access to an additional 41 branches (more than doubling Bank ABC Egypt’s current branches), and a range of digital banking services, leveraging Bank ABC’s innovative digital capabilities such as its mobile only digital bank ila, and its leading payments capabilities in its subsidiary, Arab Financial Services.
With a track record of performance in 15 markets across 5 continents, Bank ABC’s robust financial balance sheet would provide the combined entity with the required scale and support to reach a larger customer base, ensure superior asset quality and execute higher international financial transactions with a strong foothold across the MENA region. This latest development in Bank ABC’s operations will enhance its ability to deliver in the region and open a gateway to and from Egypt for Bank ABC’s customers.
Bank ABC Group Chief Executive Officer, Dr. Khaled Kawan, commented: “The acquisition of BLOM Bank Egypt is a landmark moment for Bank ABC. We have been searching for the right opportunity for many years—seeking an acquisition that further cements our reputation as MENA’s leading international bank. This acquisition is a strategic fit for both banks, combining BLOM Bank Egypt’s strong market presence and heritage with Bank ABC’s track record of innovation. We expect the acquisition to unlock considerable synergies and growth potential, allowing maximisation of value across all our stakeholders. We would like to thank our advisors; HSBC, Freshfields Bruckhaus Deringer and Zulficar & Partners for their commitment and dynamism throughout the entire transaction process.”
Mr. Saad Azhari, Chairman and General Manager of BLOM Bank Lebanon, commented: “BLOM Bank Egypt has delivered strong returns for our Group, and we are confident that it will continue this legacy of success as a part of Bank ABC Group. We wish the BLOM Bank Egypt team a great future in their new home. We would also like to extend a note of gratitude to CI Capital, our exclusive financial advisor, and Baker McKenzie, our legal advisor, for their exemplary work throughout this transaction.”
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. CI Capital acted as the exclusive financial advisor to BLOM Bank Lebanon, while Baker McKenzie acted as legal counsel.