QNB Completes Due Diligence On NSGB; US$2.8 Bln Deal May Close Next Week

Qatar National Bank (QNB) has completed the due diligence on the acquisition of a 77.2% stake valued at about US$ 2.8 billion in Cairo-based National Societe Generale Bank (NSGB) and the deal is likely to be completed next week, a person close to the deal told Zawya.

QNB, the state lender seeking to boost its regional presence through acquisitions, hired J.P. Morgan Chase to advice on its planned buy of Societe Generale’s Egyptian arm, Reuters reported in September. The Egyptian Financial Supervisory Authority (EFSA) had given the Qatari bank 60 days to complete due diligence, which it did last week, the person said on condition of anonymity, because he is not authorized to speak on the subject.

French bank Societe Generale holds 342 million shares, representing 77.174%, in NSGB, according to a filing made to the Egyptian Stock Exchange. The rest of the shareholding is split between East Delta Flour Mills, National Bank of Egypt, Principal Bank for Development and Agricultural Credit, Misr Insurance Company, Egyptian National Postal Authority, Egyptian Savings Fund, the Egyptian arm’s board of directors and the public.

Egyptian investment bank EFG-Hermes has valued NSGB’s share at EGP 50; this would value the deal at EGP 17.114 billion, or about US$ 2.801 billion, the person said.

QNB raised US$ 1 billion through a bond issue earlier this month, its second debt market foray this year. The bond, due to mature in February 2018, launched at a spread of 145 basis points over midswaps, and demand for the deal was strong, according to Reuters.

NSGB chairman and managing director Mohamed El-Dib separately told Zawya that there were no plans for retrenchment after the deal is done.

“The deal is important for the Egyptian banking sector, as it will infuse a higher degree of confidence among potential investors in the country. It will refresh the Egyptian market,” said Hany Abou El-Fotouh, former head of compliance at CI Capital.

Zawya