BLOM BANK SAL Announces the Execution of an SPA in Relation to the Sale of its Stake in BLOM BANK Egypt SAE to Arab Banking Corporation (B.S.C.)

Beirut, Lebanon | 17 January 2021 – BLOM BANK SAL (“BLOM BANK”) and Arab Banking Corporation (B.S.C.) (“Bank ABC”) are pleased to announce that they have signed a definitive agreement on Friday 15 January 2021 whereby BLOM BANK SAL will sell its entire 99.4% stake in BLOM BANK Egypt SAE (“BLOM BANK Egypt”), its Egyptian subsidiary, to Bank ABC, subject to obtaining the approvals of the Central Bank of Egypt and the Central Bank of Lebanon, among other regulatory approvals in Egypt and Bahrain.

The proposed cash consideration to be offered by Bank ABC for 100% of BLOM BANK Egypt under the transaction is EGP 6,700 million[1] (USD 427mn[2]).

BLOM BANK will sell its stake to Bank ABC by tendering its shares into a mandatory tender offer to be launched by Bank ABC to all shareholders[3] of BLOM BANK Egypt after obtaining and complying with all mandatory regulatory approvals, including the approval of the Central Bank of Egypt and the Financial Regulatory Authority in Egypt. The closing of the transaction is expected to take place in the first half of 2021.

Mr. Saad Azhari, Chairman and General Manager of BLOM BANK, commented: “This transaction demonstrates our continuous commitment to our stakeholders and dedication to our strategy. It will allow BLOM BANK to comply with the latest regulations issued by the Central Bank of Lebanon, which stipulate that all Lebanese banks must increase their equity by 20%. I would like to take this opportunity to thank our team in BLOM BANK Egypt for their dedication and perseverance that have made our operation in Egypt successful.  I would also like to thank the management and transaction team at Bank ABC for their cooperation and professionalism during the entire transaction process as well as the CI Capital and Baker McKenzie teams for their commitment and dynamism.”

Commenting on the transaction, Dr. Khaled Kawan, Group CEO of Bank ABC said: “The acquisition of BLOM BANK Egypt is a unique opportunity for Bank ABC to fulfil its longstanding strategic commitment to inorganically expand its core business, giving us a significantly enhanced platform for future growth, in one of the most attractive markets in the region.  We have an active relationship with our regulators and will be working to secure their approvals to complete the deal as swiftly as possible. We will then look forward to working with our new BLOM BANK Egypt team to combine Bank ABC Egypt and BLOM BANK Egypt thereby creating a new powerhouse in the Egyptian banking sector. We also thank the management teams of BLOM BANK Lebanon, BLOM BANK Egypt and their advisors for the seamless execution process that has led to this agreement.”    

BLOM BANK SAL was advised by CI Capital, while Baker McKenzie acted as legal counsel.

Bank ABC (B.S.C.) was advised by HSBC, while Freshfields Bruckhaus Deringer and Zulficar & Partners acted as legal counsel.

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