EFG-Hermes, Egypt's largest investment bank, has sealed a deal with the Qatari Qinvest, owned by the Qatar Islamic Bank, to form a regional investment bank.
Qinvest will control 60 per cent of the new bank, which will be called EFG-Hermes Qatar, and provide $250 million to increase its capital. The rest will be owned by EFG-Hermes. The latter has the option to sell its 40 per cent stake to Qinvest within a year but before 36 months from the signing for LE1 billion, a move that would mean that EFG-Hermes would be swallowed by the new bank.
The agreement is still pending the approval from shareholders and regulators. EFG-Hermes shares have been on the rise since the deal was revealed to complete a rally started in the last quarter. The stock is up 31 per cent this year, compared with a 37 per cent gain for the EGX30.
According to an EFG-Hermes press release, the deal aims at creating a leading investment bank with operations covering the Middle East, Africa, Turkey and South and South East Asia.
© Al Ahram Weekly 2012
