Abu Dhabi Commercial Bank (ADCB) on Thursday signed an agreement with the Employees' Provident Fund (EPF) of Malaysia to purchase a 25 per cent equity stake in RHB Capital Berhad for Dh4.4 billion.
Based on a purchase price of RM7.20 (Dh8.2) per share, the deal is valued at RM3.876bn, the largest by a Middle East investor in the Malaysian financial sector.
The investment will pave the way for a strategic deal between EPF and ADCB and drive RHB Cap's ambition to become one of the top three financial service providers in Asean by 2020.
With this deal, ADCB will become the second-largest shareholder of RHB Capital.
After this sale, the single largest shareholder EPF will own about 57 per cent, down from the 82 per cent stake it acquired after completion of a general offer for the banking group on July 18, 2007.
Approval for the deal was given by Malaysian Ministry of Finance via Bank Negara Malaysia on February 29 and the Foreign Investment Committee on March 21.
The process is expected to be completed soon.
In a ceremony held at the Putrajaya corporation headquarters yesterday, the deal was signed on behalf of EPF by Chairman Tan Sri Samsuddin Oman, CEO Datuk Azlan Zainol and ADCB was represented by Chairman Saeed Al Hajeri.
Speaking at the event, Datuk Azlan Zainol said: "We are pleased to enter into a strategic partnership with ADCB, a leading full-service commercial bank operating in the GCC with strong footprints in retail, commercial, corporate and high net-worth segments in the United Arab Emirates.
"RHB Capital and ADCB will now be positioned to leverage on growing business flows between the GCC and Asean and strengthen both banks' strategic position in the global Islamic banking market," he added.
Saeed Al Hajeri said: "This acquisition enables both ADCB and RHB Capital to promote the links between the respective countries and regions, while generating significant value for stakeholders in the process due to inherent synergies. It is ADCB's intention to support RHB Capital in its strategic agenda of being a top financial services provider in Asean."
Al Hajeri said: The plan to double profit in three years is very attractive, aggressive and possible. My personal belief is that they will reach that target easily. In our assumptions we look at future value. That is why we are not looking to make a quick buck. We are long-term investors. The goal is to become the number one bank in South East Asia."
© Emirates Business 24/7 2008
