FAB may restart talks on Bank Audi's Egypt unit
The initial round of discussions were put on hold in May by the two sides citing difficult market conditions
First Abu Dhabi Bank (FAB), the UAE's largest lender by assets, may restart talks to acquire the Egyptian business of Lebanese Bank Audi in a deal estimated at around $700 million.
FAB will have an internal meeting this week to decide on a way to resume negotiations and put in a final bid, Reuters said quoting reliable sources. A second source was quoted as saying that FAB planned to restart negotiations within two weeks.
While FAB declined to comment, a spokesperson for Bank Audi said it had not been contacted by FAB regarding the matter.
The proposed resumption of the acquisition talks would come more than three months after the initial round of discussions were put on hold in May by the two sides citing difficult market conditions triggered by the Covid-19 pandemic.
"This is due to the unprecedented circumstances and the uncertain outlook relating to the Covid-19 pandemic, and is in the best interests of our shareholders, customers and employees," FAB said in statement in May to the Abu Dhabi Securities Exchange.
It was in January 2020, FAB, which was came into being in 2017 following a merger of National Bank of Abu Dhabi and First Gulf Bank, first reported that it was in discussions with Bank Audi to acquire its business in Egypt. It also formed a working group on the potential acquisition.
Bank Audi's Egyptian subsidiary has 50 branches with total assets of $4.4 billion at the end of September 2019, according to Bank Audi's chief financial officer Tamer Ghazaleh. The lender began operations in Egypt after acquiring Cairo Far East Bank in 2006.
Bank Audi had been negotiating with three banks to sell its unit in Egypt to exit the country amid the ongoing banking crisis in Lebanon. This came just a few months after the Lebanese bank looked close to acquiring the National Bank of Greece's (NBG) Egypt arm.
Gulf lenders are keen to expand their market share in Egypt, the Arab world's most populous country. Emirates NBD, Dubai's largest lender, is currently in talks to buy the Egyptian unit of Lebanon's Blom Bank.
Recently, Kuwait Finance House suspended its acquisition process of Bahrain's Ahli United Bank until December, citing difficulty in finalising the transaction during the coronavirus outbreak.
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