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Wednesday, 14 July 2021

Bank ABC launches Blom MTO

Bahrain’s Bank ABC has submitted a mandatory tender offer to acquire up to 100% of Blom Bank Egypt, the Financial Regulatory Authority (FRA) said (pdf) yesterday. The transaction would see the Gulf lender purchase up to 300 mn shares in Blom Egypt at EGP 22.33 apiece, valuing the business at USD 427 mn (EGP 6.7 bn). Bank ABC must pay the amount in USD at the exchange rate stated by the CBE during the seven days preceding the FRA’s approval on the MTO, the statement said. The purchase includes the bank’s physical and non-physical assets, and customer accounts.

When could Bank ABC finalize its acquisition of Blom Bank? This depends on when the FRA and the Central Bank of Egypt give the all-clear to the sale. Both the Lebanese and Bahraini central banks reportedly approved the transaction in March. A report in the local Egyptian press in May suggested that CBE approval was weeks away, potentially allowing the transaction to be finalized in the second quarter. Now in 3Q, we’re still yet to hear anything from the CBE.

A refresher: Bank ABC reached an agreement to purchase Blom’s Egypt unit in January this year following several months of speculation about whether fellow GCC lender Emirates NBD would compete for the acquisition. ABC already has a presence in Egypt with Bank ABC Egypt, in which it owns a 93% stake. Blom and Bank Audi are both leaving Egypt as they cope with fallout from a severe financial crisis in their home market of Lebanon, with Bank Audi due to finish transferring its Egypt assets to First Abu Dhabi Bank next year. The National Bank of Greece (NBG) is also set to terminate its activities in the Egyptian market after years of unsuccessful attempts to divest its portfolio here.

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