#UAE Lender First #AbuDhabi Bank Pulls Bid for Egypt’s EFG-Hermes - Bloomberg

UAE Lender First Abu Dhabi Bank Pulls Bid for Egypt’s EFG-Hermes - Bloomberg

First Abu Dhabi Bank PJSC withdrew its billion-dollar bid for investment bank EFG-Hermes after facing lengthy regulatory delays in Egypt, people familiar with the matter said.

Egypt’s regulator was slow and imposed new demands on FAB, the people said, declining to be identified as the matter is private. The United Arab Emirates-based lender would have been unable to complete the deal within a planned timeframe, they said.

EFG-Hermes slumped 20% to 15.46 Egyptian pounds in Cairo trading, after having closed above FAB’s 19-pound per share offer on Wednesday. The February bid valued the investment bank at $1.2 billion in what would have been FAB’s biggest deal in Egypt.

For its part, FAB blamed market volatility amid Russia’s invasion of Ukraine as the reason for pulling out. Shares of the UAE lender fell as much as 2.3% on Thursday.

“After careful consideration and in the context of ongoing global market uncertainty and volatile macro-economic conditions, First Abu Dhabi Bank has decided to withdraw its non-binding offer,” the lender said in a statement on Thursday. “Egypt remains a strategically important market for FAB.”

A spokesperson for EFG-Hermes declined to comment.

Egypt’s economy is under increasing pressure from the shockwaves of the war in Ukraine. The central bank held a special policy meeting in March and raised interest rates for the first time since 2017 while allowing the currency to weaken sharply.

To help shore up the North African nation’s economy, Gulf countries including the UAE are investing there. On Wednesday, Abu Dhabi wealth fund ADQ unveiled plans to buy stakes worth $1.82 billion in Egyptian companies.

FAB, which is also controlled by Abu Dhabi’s government, has previously expanded into Egypt by buying Bank Audi’s local unit. EFG-Hermes would have given it a larger presence in the Arab world’s most populous country alongside a foothold in several emerging markets including Kenya, Nigeria and Bangladesh.