Bahrain-based Arab Banking Corporation (ABC) On Tuesday announced that it had entered into an agreement to acquire a 49% ownership stake for $60 million in Mediterranean Bank S.A.L., a Libyan bank headquartered in Benghazi, in the North East of Libya, and with branches in Tripoli and Misurata. The acquisition, which is subject to final regulatory approval from the Central Bank of Libya, is expected to close before the end of the first quarter of 2011.
“ABC will also manage the bank on a day-to-day basis pursuant to a management agreement,” the bank in a statement said.
Mediterranean Bank was established in 1997 and operates under the supervision of the Central Bank of Libya. It provides retail and corporate banking services.
The transaction will see ABC inject additional capital of Libyan Dinars 74 million (approximately $60 million) into Mediterranean Bank in return for receiving a 49% shareholding in Mediterranean Bank.
Following the completion of the transaction, the bank added, ABC will have the right to appoint three directors (out of a total of seven) to the board of Mediterranean Bank.
“ABC currently undertakes a significant level of business relating to Libya, having established the first ever representative office of a foreign bank in Tripoli back in 1988. The acquisition of an equity stake in Mediterranean Bank therefore constitutes a natural extension of ABC’s existing business in North Africa. ABC intends to invest considerable resources in integrating Mediterranean Bank into the ABC network, drawing upon ABC’s North African and international expertise to enable Mediterranean Bank to significantly grow its business over the medium term, within a robust ABC Group risk management framework,” the bank added.
“I am delighted that we have agreed to form a strategic partnership with Mediterranean Bank. The acquisition by ABC of a 49% shareholding in Mediterranean Bank represents a unique opportunity to cement the geographic reach of ABC’s existing North African businesses, which already include operations in Egypt, Tunisia and Algeria, and will provide ABC with access to the increasingly important Libyan banking market,” said Hassan Ali Juma, President and Chief Executive of ABC, while commenting on the transaction.
“I am confident that Mediterranean Bank will, with the support of the ABC Group, establish itself as one of the leading banks in Libya, as the competitive landscape in Libya evolves as a result of the recent opening of the banking market to foreign capital,” he added.