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Monday, 28 September 2020

Orascom Financial Holding eyeing United Bank of Egypt?

M&A WATCH- Is Orascom Financial eyeing the United Bank of Egypt? Orascom Financial Holding (OFH) could look at acquiring a controlling stake in the United Bank of Egypt in what could be the newly formed company’s first acquisition and foray into the country’s banking system, Orasom Investment Holding (OIH) Chairman Naguib Sawiris told Hapi Journal. Sawiris didn’t explicitly say he was going ahead with a bid, noting just that United Bank would within OFH’s price range more than the Lebanese banks currently up for sale — Blom Bank and Bank Audi — which will likely cost somewhere between USD 600-900 mn. Naguib’s son Onsi — who will play a leading role in OFH — had told Enterprise last week that the company has yet to make any decisions on its investment plans and is still working on a strategy that it will announce by the end of the year. OFH was created through a demerger earlier this month (OFH) to manage Orascom’s financial investments.

Naguib has for more been looking for a way into the nation’s banking industry, but has been rebuffed by successive central bank governors. Sawiris confirmed in 2017 that he had been rebuffed in his quest for a banking license, saying that “if the governor of the Central Bank of Egypt gives me a license for a bank, I’ll open it tomorrow.” Naguib has since said he would like a license to open an SME-focused lender and has pushed ahead since 2015 with a foray into non-bank financial services that has seen companies he controls acquire significant stakes in investment bank Beltone and consumer and structured finance player Sarwa.

Separately, OIH is looking at other new ventures in the transport and logistics industries, including multipurpose transport projects on offer from the Transport Ministry, Naguib told Hapi Journal. OIH is waiting on these projects to be opened up to the private sector, he said, without providing further details.

Background: The sale of United Bank — which is 99% owned by the Central Bank of Egypt (CBE) — was reportedly put on hold earlier this year as the pandemic delayed the completion of the due diligence. CBE Governor Tarek Amer had said last year that the sale was moving forward, after tapping EFG Hermes and New York-based Evercore to act as advisors. The CBE had first announced in 2017 its intention to sell the bank to a strategic investor.

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