Bahrain-based Arab Banking Corp. (BSC) on Jan. 15 entered into an agreement to acquire Lebanese lender Blom Bank SAL's 99.4% stake in unit Blom Bank Egypt SAE.

The deal is expected to complete in the second quarter, pending regulatory approvals in Egypt, Lebanon and Bahrain, Bank ABC said Jan. 17. The two banking groups launched preliminary discussions in September 2020 and later announced in December that they were in exclusive negotiations over the deal.

Bank ABC's proposed cash consideration for 100% of Blom Bank Egypt under the acquisition is 6.70 billion Egyptian pounds. The remaining 0.6% stake in Blom Bank Egypt is owned by other individuals, according to the statement.

For a time, First Abu Dhabi Bank PJSC and Emirates NBD Bank PJSC, two of the largest banking group by assets in the United Arab Emirates, were also reported to be interested in acquiring Blom Bank Egypt.

Bank ABC said the deal would reposition its Egyptian business among Egypt's top 20 banks and grow scale in the Middle East and North Africa. The group is set to acquire 41 additional branches in the country and expand in retail, corporate and small and medium-sized enterprise lending, it added.

Bank ABC has been operating since 1999 in Egypt, where it has 27 branches.

HSBC Bank Middle East is Bank ABC's sole financial adviser on the deal, with Freshfields Bruckhaus Deringer and Zulficar & Partners as legal advisers. CI Capital serves as Blom Bank Lebanon's financial adviser, while Baker McKenzie acts as legal counsel.

Bank ABC's statement comes after Reuters reported Jan. 14, citing sources, that the lender had completed the acquisition.

As of Jan. 15, US$1 was equivalent to 15.66 Egyptian pounds.