Lebanon-based Bank Audi sal (Bank Audi) has agreed to sell 100% share capital of its subsidiary in Egypt, Bank Audi sae, to First Abu Dhabi Bank (FAB).
Prior to the agreement, FAB has completed an in-depth due diligence exercise on Bank Audi sae (Egypt) and obtained the preliminary approval of the Central Bank of Egypt.
Bank Audi sae’s total assets, at the end of September 2020, amounted a total of EGP83.2bn ($5.3bn) and shareholders’ equity was EGP7.6bn ($479m).
Its retail and corporate banking operations and network of 53 branches would complement FAB’s operations in Egypt, with 17 branches and a presence in the country.
The Lebanon-based bank said that the proceeds from the divestiture will be used to enhance its capitalisation and financial resilience.
Bank Audi group chairman and CEO Samir Hanna said: “This transaction represents the best outcome for all our constituencies, in particular, our customers and our employees in Egypt based upon the challenges we have been facing in Lebanon for the past 16 months.
“This transaction also represents a strong vote of confidence in the effectiveness of the group’s governance and business model across the region.”
The acquisition is expected to significantly enhance the size and scale of FAB’s operations in Egypt, and strengthen its position as a large-scale foreign bank, with pro-forma total assets of more than EGP120bn ($8.1bn).
FAB chief executive officer André Sayegh said: “FAB has a long history in Egypt, having opened its first branch in the country more than 45 years ago.
“FAB’s first international acquisition accelerates the Group’s expansion in a high potential market, with the addition of Bank Audi (Egypt)’s operations offering the scale, expertise and financial strength to support our growth journey and sustainable returns.
“FAB is committed to supporting customers in Egypt across a full range of retail and corporate banking needs, as well as serving as bridge for trade and investment flows across the MENA region and beyond.”
The closing of the transaction is subject to satisfaction of certain customary conditions, including the receipt of regulatory approvals in the UAE and Egypt, and is anticipated in a few months.
FAB and the London branch of UBS acted as financial advisors, while Freshfields Bruckhaus Deringer and Matouk Bassiouny & Hennawy served as legal advisors to FAB on the acquisition.
EFG Hermes served as a sole financial advisor, while Dechert and Zulficar and Partners acted as legal adviser to Bank Audi on the deal.
