Arab Banking Corporation (B.S.C.) (Bank ABC) has submitted a mandatory tender offer (MTO) approval request to Egypt’s Financial Regulatory Authority (FRA) aiming to purchase up to 100 percent of the issued capital of Blom Bank Egypt S.A.E. (Blom Egypt), ABC said in a statement sent to the Bahraini bourse on Sunday.
The document, seen by Ahram Online, also included Bank ABC’s confirmation that the FRA approval on the MTO was received on 18 July, and the bank has received all other relevant regulatory approvals required to complete the acquisition of Blom Egypt.
It noted that the MTO validity period commences as of 25 July through 5 August, adding that the completion of the acquisition will take place after the MTO validity period has expired and a number of other pre-closing actions have taken place.
The Bank stated that further announcement will be made at that time.
Bank ABC said that Egypt is a key strategic market for the bank, having established its presence through the acquisition of Egypt Arab African Bank in 1999.
It currently operates through Bank ABC in Egypt, which has 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,” according to the statement.
It elaborated that 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 and to provide the Bank ABC Group with a highly profitable franchise in Egypt.
The bank said that it considers Egypt as one of the most fundamentally attractive markets in MENA region.
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.
“The acquisition of Blom Bank Egypt is a unique opportunity for Bank ABC to fulfill 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," said Khaled Kawan, the Group CEO of Bank ABC.
"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."
Meanwhile, Saad Azhari, Chairman and General Manager of Blom Bank Lebanon, said that the transaction 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.
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