Lebanon: Blom acquires Misr


Kate Luxford
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Banque du Liban et d’Outre Mer (Blom), Lebanon’s largest bank, with a paid-up capital of $128.3 million, is set to continue its regional expansion via its acquisition of Egyptian-Romanian bank, Misr Romanian Bank (MRB). Saad Azhari, general manager of Blom, said: “We expect the acquisition to be completed in the first two weeks of December [2005].” He expects Blom eventually to hold between 80% and 100% of MRB’s shares.

The acquisition began with an agreement by Blom to buy Banque Misr’s 33.26% stake in MRB, subject to Blom’s ability to acquire more than two-thirds of the bank via a tender offer. Azhari explains that the acquisition opportunity stems from the Egyptian government’s privatization programme, and a 2003 banking law requirement that banks increase their capital to E£500 million ($86.8 million), which led to the tender offer.

If Blom is able to acquire 100% of MRB, the purchase will involve a total outlay of E£581 million.

Azhari stresses that “We’re always looking to expand regionally”, and notes that the purchase enables Blom to gain entry to the large Egyptian market. He says that the market has undergone significant reforms in recent years, and Blom aims to expand MRB’s services, particularly in retail banking. The acquisition also gives the bank a foothold in Romania, where MRB will remain a niche bank serving the country’s Arab community.

In addition to its Lebanon headquarters, Blom now has a presence in Syria, Egypt, the Gulf and Jordan, as well as to units in Switzerland, France, Cyprus and the UK. In Syria, Jordan and Egypt, Azhari says “Blom’s policy is to be a full-service bank.”

Regarding other regional plans, sources close to the bank said in early November that Blom was planning to list its shares on the Dubai International Financial Exchange.

If the rumours prove to be correct, the bank will become the second Lebanese institution to list on the DIFX; telecom firm Investcom listed on the new exchange in October.