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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.

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