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Wednesday, 16 September 2020

Bahrain's Ahli United Bank submits offer to buyout Egypt unit

WATCH THIS SPACE- Bahrain’s Ahli United Bank is seeking 100% ownership of its Egypt unit, with the Financial Regulatory Authority (FRA) saying (pdf) yesterday that AUB and “Misr Strategia” (which reads to us like a special purpose vehicle or “SPV” set up for the transaction) have submitted an offer to buy 14.52% of the Egyptian entity from undisclosed parties. AUB’s 2018 annual report suggests that the bank already owns 85.5% of its Egyptian subsidiary; AUB entered the market in 2006 with its acquisition of Delta International Bank. The bank’s website says AUB has 42 branches in Egypt. The transaction, which the FRA is still reviewing, would be worth about EGP 1.29 bn, according to the statement.

Background: The news could signal an about-turn by the parent bank after local press reports earlier this year suggested that it was looking to sell its Egypt unit — or it could just be AUB clearing out minority shareholders to streamline things ahead of a divestment. Kuwait Finance House has been in the process of acquiring AUB since 2019 but the potential USD 8.8 bn transaction was postponed until December earlier this year due to the coronavirus pandemic. Though Egypt’s banks are considered desirable M&A targets, it’s rare that they are up for sale. Acquisitions are currently the only way into Egypt’s banking sector, as the CBE has for years denied new banking licenses and has told new entrants to see whether any of the country’s 38 licensed banks might be for sale.

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