Al Ahli Bank of Kuwait K.S.C. (‘ABK’) announced that it has closed the deal with Piraeus Bank SA (‘PB’) to acquire 98.5% of Piraeus Bank Egypt (PBE) with the official share transfer taking place on November 10, 2015.
This marks the completion of the transaction, which was announced by ABK and Piraeus Bank in May 2015. The total consideration is equivalent to US$150 million for PB’s stake, which represents a multiple to the stated tangible book value of PBE as of 31 March, 2015 of ca.1.5x. The new ABK subsidiary in Egypt will be rebranded ABK Egypt subject to name change approval by the official authorities, and the new identity will be rolled-out over the entire 39 branch network in the first half of 2016.
Mr. Talal Mohammed Reda Behbehani, Chairman of ABK, said: “We are very proud to formally welcome PBE and its employees and customers into the ABK family. ABK is firmly committed to investing in its growth, and Egypt is a core market for us, building on the long standing business relationship that already exists between our two countries. We look forward to developing and growing our business in the Egyptian market. I’d like to thank all the concerned authorities in Kuwait and Egypt who have helped us to complete the deal in a very good time frame.
Mr. Michel Accad, Chief Executive of ABK, said: “Today’s closing announcement is a transformational milestone in ABK’s development into a significant regional player in the Middle East. It helps us to diversify our business profile and extends our regional connectivity, providing many new opportunities for ABK and ABK (Egypt) to grow and flourish. I would like to extend my warm thanks to the regulators and to all our colleagues and associates at both banks for their hard work and generous spirit of cooperation.”
ABK’s acquisition of Piraeus Bank Egypt realizes ABK’s regional vision, Egypt being considered a key focus market with a well-regulated yet underpenetrated banking market, further supported by the country’s attractive macro-economic fundamentals and robust population dynamics, boasting a young population of 85 million with a vibrant middle class.
ABK has been advised by J.P. Morgan as its exclusive financial advisor on the acquisition of PBE, while Ernst & Young acted as transaction and tax advisors and Zulficar & Partners acted as legal advisors.