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Monday, 23 November 2020

EFG Hermes, SFE to complete due diligence on AIB in February -sources

M&A WATCH- EFG Hermes and the Sovereign Fund of Egypt (SFE) will complete due diligence on the Arab Investment Bank (AIB) by February 2021 ahead of a potential acquisition of a 76% stake in the state-owned bank, Masrawy reports, citing unnamed banking sources familiar with the matter. SFE CEO Ayman Soliman said in September that the process could be wrapped up by the end of the year. EFG Hermes declined to comment on the report when we asked.

Background: EFG Hermes and the SFE announced in June that they had been given the greenlight by the central bank to start due diligence on the AIB, and that they planned to purchase of a 76% stake through a capital increase to EGP 5 bn, which they were hoping to complete before the year’s end. EFG would become the controlling shareholder with a 51% stake, while the SFE would take up to 25% The state-owned National Investment Bank (NIB) currently holds 91.4% of the bank, with the remaining 8.6% held by the Federation of Arab Republics.

A universal bank? EFG has positioned the potential acquisition as heralding its transformation into a universal bank offering a full suite of investment banking, non-bank financial services and commercial banking solutions.

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