Back to the complete issue
Sunday, 10 October 2021

EFG Hermes, SFE get cabinet signoff on Arab Investment Bank acquisition

M&A WATCH- EFG Hermes and the Sovereign Fund of Egypt have received cabinet approval for their acquisition of a 76% stake in the Arab Investment Bank (AIB), according to a decision published in the Official Gazette and picked up by the domestic press. The two institutions acquired the shares via an EGP 3.8 bn capital increase, which raised the bank’s capital to EGP 5 bn and gave EFG a 51% stake and SFE 25%. AIB's fair value was EGP 1.1 bn, according to the assessment from PricewaterhouseCoopers, which served as independent financial advisor to EFG and the SFE.

Background: We noted in August that the National Investment Bank (NIB), which held a 91.4% stake in the bank, had planned to reduce its ownership to 24%, while minority shareholders with the remaining 8.6% would offload their stakes. EFG Hermes is subscribing to 423 mn newly-issued shares for EGP 6.03 per share, at a total value of EGP 2.55 bn. Meanwhile, the SFE is taking 207 mn newly issued shares at the same per-share price totalling EGP 1.25 bn. The acquisition marks Egypt’s first full bank privatization in 15 years — and the fact that the SFE has managed to pull it off helps underscore that it’s serious about public-private partnership.

OTHER M&A NEWS- The National Bank of Egypt will purchase a 20% stake in mass transport operator Mwasalat Misr through a capital increase agreed last Wednesday, according to a press release (pdf). There was no mention of how much the state-owned giant is planning to invest. Mwasalat, which is majority-owned by Emirates National Group, operates higher-end buses along several routes in Cairo and was earlier this year awarded a 15-year contract to take charge of bus fleets in Egypt’s new cities. The company is also part of the consortium carrying out technical studies for the implementation of Cairo’s new Bus Rapid Transit system.

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. © 2022 Enterprise Ventures LLC.

Enterprise is available without charge thanks to the generous support of HSBC Egypt (tax ID: 204-901-715), the leading corporate and retail lender 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; Moharram & Partners (tax ID: 616-112-459), the leading public policy and government affairs partner; Palm Hills Developments (tax ID: 432-737-014), a leading developer of commercial and residential properties; Mashreq (tax ID: 204-898-862), the MENA region’s leading homegrown personal and digital bank; Industrial Development Group (IDG) (tax ID:266-965-253), the leading builder of industrial parks in Egypt; Hassan Allam Properties (tax ID:  553-096-567), one of Egypt’s most prominent and leading builders; and Saleh, Barsoum & Abdel Aziz (tax ID: 220-002-827), the leading audit, tax and accounting firm in Egypt.