Emirates NBD Receives Approval to Acquire Stake in Banque du Caire

Emirates NBD has acquired approval to pursue Banque du Caire, with a transaction possibly exceeding USD 1 billion. This acquisition aligns with Egypt’s government initiative to privatize state-owned assets and is in response to IMF economic reform recommendations, aiming to reduce state intervention in the economy. The completion of this deal is projected within six weeks.

Emirates National Bank of Dubai (NBD) has received approval from the Central Bank of Egypt to commence due diligence for the acquisition of Banque du Caire, a deal valued at potentially over USD 1 billion (EGP 50 billion). This information was relayed by sources to Asharq Business, indicating a swift governmental push to complete this transaction within approximately six weeks.

This acquisition is part of Egypt’s initiative to privatize state-owned entities, aligning with wider economic reforms urged by the International Monetary Fund (IMF). The IMF recently advised Egypt to implement a new economic model aimed at diminishing the state’s influence within the economy.

An official statement regarding the acquisition has yet to be announced, although public interest has surged. Television host Amr Adib expressed skepticism on X, asserting, “Selling the bank in secret is nearly impossible. We’ll soon find out who’s trying to buy it and what their offer is.” He further noted that efforts to sell Banque du Caire have been ongoing since the 1990s.

As of September, Banque du Caire, owned by Banque Misr, has reported assets totaling USD 9.4 billion (EGP 478 billion). Banque Misr plans to divest a 45 percent stake in Banque du Caire for approximately USD 1.2 billion (EGP 60 billion) and may offer additional shares on the Egyptian stock exchange.

Egypt’s emphasis on privatizing state-owned enterprises is seen as a crucial strategy to enhance economic productivity, attract foreign investments, and alleviate the fiscal burden on the public sector. Prime Minister Mostafa Madbouly previously announced intentions to divest shares in at least ten government-held companies by the close of 2025, which will include four firms under military control.

In sum, the proposed acquisition of Banque du Caire by Emirates NBD highlights Egypt’s broader strategy to privatize state-owned enterprises as part of its economic reform agenda. This initiative not only aims to enhance economic efficiency but also seeks to attract foreign capital investment while reducing public sector financial pressure. The transaction’s potential finalization within six weeks underscores the urgency of these reforms in response to IMF recommendations.

Original Source: egyptianstreets.com