Back to the complete issue
Wednesday, 12 August 2020

Blom Bank confirms potential Egypt exit

M&A WATCH- Blom Bank confirms potential Egypt exit as Lebanon falls into deeper economic crisis: Lebanon’s Blom Bank confirmed yesterday that it is looking to sell its Egypt assets in response to the financial crisis gripping its home country. The bank said in a statement that the Central Bank of Egypt (CBE) has approved a request for it to begin the due diligence process on a transaction that could be valued at USD 250-300 mn, Reuters reports, citing unnamed sources. Any agreement will be subject to approval by the bank’s board of directors and the CBE, the bank said.

Emirates NBD looks to be in the running: The local press reported earlier this week that Emirates NBD could be interested in buying Blom’s Egypt arm. Reuters’ sources corroborate the link, saying that the Dubai bank was among several potential suitors that Blom has approached. If Emirates NBD were to successfully snap up the Lebanese bank, its footprint in Egypt would increase substantially, adding Blom’s 41 branches to its existing 69.

This isn’t the first Lebanese bank to look for the exit door from Egypt: Rival Bank Audi has also been looking to sell its Egypt assets, but potential buyer First Bank Abu Dhabi shelved acquisition talks in May due to the uncertainty caused by the coronavirus.

A catastrophic economic crisis in Lebanon is to blame: Blom Bank reported a 77% plunge in profits last year as Lebanon endures its worst financial crisis since the country’s civil war. With the currency in freefall, soaring inflation and a paralyzed financial system, banks are racing to boost their capital after the Lebanese central bank raised capital requirements in a bid to shore up the banking sector.

Advisers: Sources cited by Reuters and local media report that Blom has hired CI Capital to advise on the sale. Baker McKenzie is reportedly providing legal advice.

Enterprise is a daily publication of Enterprise Ventures LLC, an Egyptian limited liability company (commercial register 83594), and a subsidiary of Inktank Communications. Summaries are intended for guidance only and are provided on an as-is basis; kindly refer to the source article in its original language prior to undertaking any action. Neither Enterprise Ventures nor its staff assume any responsibility or liability for the accuracy of the information contained in this publication, whether in the form of summaries or analysis. © 2021 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of Commercial International Bank (tax ID: 204-891-949), the largest private-sector bank in Egypt; EFG Hermes (tax ID: 200-178-385), the leading financial services corporation in frontier emerging markets; SODIC (tax ID: 212-168-002), a leading Egyptian real estate developer; SomaBay (tax ID: 204-903-300), our Red Sea holiday partner; Infinity (tax ID: 474-939-359), the ultimate way to power cities, industries, and homes directly from nature right here in Egypt; CIRA (tax ID: 200-069-608), the leading providers of K-12 and higher level education in Egypt; Orascom Construction (tax ID: 229-988-806), the leading construction and engineering company building infrastructure in Egypt and abroad; and Act Financial (tax ID: 493-924-612), the leading activist investor in Egypt.