Kuwait's Al Ahli Bank is acquiring a 98.5% stake in the Egyptian unit of the Greek-based Piraeus Bank for $150m according to a filing in the Kuwait Stock Exchange.
The deal will help Al Ahli with its plan of regional expansion while giving a liquidity boost to Piraeus.
The acquisition will result in the exit of Greece’s second-biggest bank by assets from Egypt’s market around 10 years after it acquired a 70% stake in Egyptian Commercial Bank for $23m.
Bloomberg quoted Al-Ahli CEO Michel Accad as saying that the bank will acquire full control over 39 branches that handle corporate and retail clients and will further invest to help the franchise grow.
The purchase amount is worth 1.5-times the book value of Piraeus Bank Egypt (PBE). The transaction is still awaiting approvals in Egypt, Greece and Kuwait, along with an approval from the Hellenic Financial Stability Fund.
As part of the deal, Al Ahri will also acquire loans worth €23m ($26m) from the Greek bank that are related to its Egyptian unit.
With the divestment, Piraeus will have an additional liquidity of €200m for the group.
Piraeus Bank CEO Anthimos Thomopoulos said: "The successful conclusion of the disposal of Piraeus Bank Egypt underlines our commitment to our shareholders, in full alignment with our restructuring plan.
"The transaction reflects a fair value for our subsidiary and provides our Group with capital accretion, freeing liquidity at the same time. We believe that now it is our duty to focus towards financing the Greek economy."