The 15 May Bridge crosses over the Nile River in Cairo, Egypt. Abu Dhabi's Chimera aims to acquire a majority stake in Egypt-based Beltone Financial Holding. EPA
The 15 May Bridge crosses over the Nile River in Cairo, Egypt. Abu Dhabi's Chimera aims to acquire a majority stake in Egypt-based Beltone Financial Holding. EPA
The 15 May Bridge crosses over the Nile River in Cairo, Egypt. Abu Dhabi's Chimera aims to acquire a majority stake in Egypt-based Beltone Financial Holding. EPA
The 15 May Bridge crosses over the Nile River in Cairo, Egypt. Abu Dhabi's Chimera aims to acquire a majority stake in Egypt-based Beltone Financial Holding. EPA

Business

Abu Dhabi’s Chimera to buy majority stake in Egypt’s Beltone in expansion push

The company aims to acquire between 51% and 90% of Beltone for an offer price of $0.079 per share

Fareed Rahman
Fareed Rahman

June 19, 2022

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  • Arabic

Abu Dhabi-based investment company Chimera plans to buy a controlling stake in Egypt's financial services provider Beltone as it continues to expand its portfolio.

Chimera submitted an Acquisition Intention Letter to Egypt’s Financial Regulatory Authority to acquire between 51 per cent 90 per cent of Beltone for an offer price of 1.485 Egyptian pounds ($0.079) per share, it said in a statement on Sunday.

Chimera has appointed Matouk Bassiouny and Hennawy as legal counsel on the transaction and the offer is pending regulatory approval.

“The acquisition is in line with our expansion strategy and further enhances our regional footprint,” Syed Shueb, chairman of Chimera, said.

“Chimera aims to unlock value and implement an ambitious transformation plan, delivering a full turnaround and restoring growth and profitability to Beltone.”

Beltone is a financial services provider in Egypt and the Middle East and North Africa region offering brokerage, investment banking, asset management and equity research services.

Set up in 2007, Chimera is part of Abu Dhabi’s Royal Group, which is active in a number of sectors, including property, construction, food and beverages, hospitality, aviation and health care. The group has more than 60 companies under its umbrella and employs 20,000 people.

The latest announcement comes as Chimera continues to expand its portfolio across the region. Last year, the company said it is investing $100 million in Egyptian developer Gemini Global Development to acquire a minority equity in the company to support its expansion in the Arab world's most populous country.

Gemini is a subsidiary of Ora Developers, which is owned by Egyptian billionaire Naguib Sawiris.

It also set up the UAE’s first special purpose acquisition company (Spac) in partnership with Abu Dhabi holding company ADQ last December with the aim of investing in tech-focused businesses. The company named, ADC Acquisition Corporation, began trading on the Abu Dhabi Securities Exchange last month after it raised Dh367m ($99.9m) through an initial public offering.

Other UAE companies expanding into Egypt include Aldar Properties, Tabreed and the Al-Futtaim Group.

Last year, a consortium of Aldar and ADQ acquired a majority stake in Egypt’s Sixth of October for Development and Investment Company for 6.1bn pounds.

The National Central Cooling Company, better known as Tabreed, is also expanding in the capital Cairo with district cooling services.

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While you're here

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Most sought after workplace benefits in the UAE
  • Flexible work arrangements
  • Pension support
  • Mental well-being assistance
  • Insurance coverage for optical, dental, alternative medicine, cancer screening
  • Financial well-being incentives 
The alternatives

• Founded in 2014, Telr is a payment aggregator and gateway with an office in Silicon Oasis. It’s e-commerce entry plan costs Dh349 monthly (plus VAT). QR codes direct customers to an online payment page and merchants can generate payments through messaging apps.

• Business Bay’s Pallapay claims 40,000-plus active merchants who can invoice customers and receive payment by card. Fees range from 1.99 per cent plus Dh1 per transaction depending on payment method and location, such as online or via UAE mobile.

• Tap started in May 2013 in Kuwait, allowing Middle East businesses to bill, accept, receive and make payments online “easier, faster and smoother” via goSell and goCollect. It supports more than 10,000 merchants. Monthly fees range from US$65-100, plus card charges of 2.75-3.75 per cent and Dh1.2 per sale.

• 2checkout’s “all-in-one payment gateway and merchant account” accepts payments in 200-plus markets for 2.4-3.9 per cent, plus a Dh1.2-Dh1.8 currency conversion charge. The US provider processes online shop and mobile transactions and has 17,000-plus active digital commerce users.

• PayPal is probably the best-known online goods payment method - usually used for eBay purchases -  but can be used to receive funds, providing everyone’s signed up. Costs from 2.9 per cent plus Dh1.2 per transaction.

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Updated: June 19, 2022, 11:24 AM
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