Shares of EFG Hermes, Egypt's largest investment bank, rose on Thursday, carrying the momentum into the second trading day after receiving a non-binding offer on Wednesday from the UAE’s First Abu Dhabi Bank for the acquisition of a majority stake.
The offer to buy no less than 51 per cent share capital from FAB, the UAE’s biggest bank by assets, values EFG Hermes at about $1.2 billion. FAB offered 19 Egyptian pounds ($1.21) per share, a premium of about 21 per cent on EFG Hermes's closing price on February 8.
EFG Hermes stocks were briefly suspended on Wednesday, but surged as much as 19 per cent, the highest level on an intraday basis in almost five years after trading resumed in Cairo. The share closed the day 9.28 per cent higher at 17.20 pounds. The shares were trading 3.31 per cent higher at 17.77 pounds at 3:50pm UAE time.
The stock has rebounded about 54 per cent since last year’s low in August, giving the bank a market value of just over $1 billion, data compiled by Bloomberg shows.
FAB, which rose 1.52 per cent to Dh20.10 ($5.47) on the Abu Dhabi Securities Exchange on Wednesday, closed trading 0.8 per cent up at Dh20.26 per share on Thursday.
The EFG Hermes board is considering FAB's offer and the “completion of the transaction and setting the final price is conditional on the completion of the due diligence examination process and obtaining approvals in accordance with regulatory requirements,” EFG Hermes said in a regulatory filing.
FAB said its offer is beneficial for both parties and "represents an attractive liquidity event and a compelling value proposition for EFG Hermes' shareholders, reflecting the company’s robust fundamentals and strong future growth prospects".
"This potential transaction would represent a significant milestone for FAB, in line with the bank’s long-term strategic ambitions to become the reference institution for investment banking in the region," FAB said.
"It provides enhanced scale, specialisation, growth levers and revenue synergies, strengthening FAB’s offering and regional presence. This potential transaction will build on EFG Hermes’ strong investment banking capabilities, track record and reputable brand."
The success of the proposed transaction will mark FAB’s second acquisition in the Arab world’s most populous nation and the region's third largest economy. FAB agreed to buy Bank Audi Egypt in January 2021 and received regulatory approval in April for the deal. It began integrating the Lebanese bank's Egyptian operations in May and said it expects to complete the process by 2022.
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-3 B Koepka (US), K Bradley (US), V Hovland (Nor), A Wise (US), S Horsfield (Eng), C Davis (Aus);
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Level B DeChambeau (US), J Rose (Eng)
1 L Westwood (Eng), J Spieth (US)
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4 D Johnson (US)
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Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
