Beltone Financial Holding and Pioneers Holding boards agreed Saturday to a term sheet for a full merger. The merger will take place through a capital increase in Pioneers Holding and a share swap. On the operational side, both companies will be managed independently. Under the new arrangement, Mr. Aladdin Saba will remain CEO of Beltone Financial and Mr. Waleed Zaki CEO of Pioneers Holding.
The Pioneers capital increase of nearly 100 million shares, at a premium that is yet to be determined, will reflect the valuation of Beltone Financial and its subsidiaries in this transaction. This valuation constitutes approximately 17% of Pioneers' capital following the completion of the merger.
This step comes as both companies are looking to form a union targeting to become the largest investment bank covering the MENA region and leveraging the different strengths of Beltone and Pioneers.
The merger is pending the completion of a due diligence process and obtaining the related approvals.
Mr. Aladin Saba, CEO of Beltone Financial, said that the merger will form the largest investment banking entity in the region whereas Beltone possesses a large client network of high net worth individuals and strong relations with leading institutions both regionally and globally boosting its institutional brokerage business. Beltone also contributes a strong investment banking and asset management operation, with assets under management of approximately 20 billion pounds.
Mr. Mansour Al Gammal, Pioneers' Chairman, added that his company controls the largest retail brokerage client base in Egypt, 80 thousand investors strong. Pioneers also ranks 5th in brokerage operations in Saudi Arabia (following banks) and the UAE and also have offices in Syria and Bahrain.
Al Gammal confirmed that this new partnership will benefit both companies, seeing that Pioneers' client base forms a strong distribution network for Beltone's asset management products as well as investment banking services. The merger will ultimately help both companies leverage each other's strengths and better serve their clientele.
Furthermore, Beltone Financial's equity research division will further strengthen the union through the provision of its world class product which will now help guide investment decisions of clients from both companies.
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© Press Release 2009
