EFG Hermes advising on $500m M&A deal in Saudi Arabia, more in pipeline – exec

Egypt’s EFG Hermes is working on a $500m merger and acquisition in Saudi Arabia and expects more deals to come out of the kingdom this year, especially from the private sector, its head of investment banking told Reuters.

Saudi Arabia has made attracting greater foreign investment a key part of its economic Vision 2030 plan as it tries to diversify the economy away from its reliance on oil.

The kingdom’s impending inclusion in the FTSE Russell emerging markets index this month is expected to draw billions of dollars of foreign fund flows.

“Saudi I think will be very busy,” Mohammed Fahmi said, on the sidelines of the bank’s investment conference in Dubai which is taking place this week.

“I’m seeing a lot of RFPs (request for proposals) coming from Saudi for IPOs… Private sector companies looking to go public, which I think is a valuable thing.”

The bank is also advising on an initial public offering (IPO) in Saudi Arabia, Fahmi said, but would not give any more details.

EFG Hermes is one of the banks advising on the potential $1bn listing of Fawaz Alhokair Group’s Arabian Centres Company expected in the second quarter, Reuters has reported, although EFG has declined to comment on its role.

Another executive at EFG Hermes told Reuters in December that the investment bank was working on a major M&A deal in the health sector in Saudi Arabia.

In addition, Fahmi said there were deals underway in the automotive, banking, and facilities management sectors in the kingdom and in the United Arab Emirates.

In Egypt, EFG Hermes is working on a potential fourth quarter $300m IPO, Fahmi said.

Another IPO for state-owned Alexandria Container and Cargo Handling may occur as soon as the second quarter of this year, Mohamed Ebeid, co-CEO of EFG Hermes Investment Bank told Reuters. EFG Hermes is managing the sale along with Citigroup.

Egypt this week revived its privatisation programme, which has lain dormant for more than a decade, with the sale of a 4.5 per cent stake in tobacco monopoly Eastern Company, which EFG adivsed on.

EFG Hermes is also working on a number of IPOs with private companies in Egypt, Ebeid said, mostly on the industrial side.