Saudi Arabia’s Kingdom Holding Company (KHC) announced today it will acquire 16.2 per cent stake in Banque Saudi Fransi for approximately SR5.8bn ($1.5 billion), positioning KHC as the largest shareholder in the bank.

KHC will pay SR29.5 per share of the bank, said a statement.

KHC will acquire the stake from Credit Agricole Corporate and Investment Bank, the corporate and investment banking arm of Crédit Agricole, which, along with KHC, will remain as a strategic investor in the bank and will continue to support the growth and expansion of its operations.

The deal was signed by KHC chief executive officer Eng Talal Al Maiman and Sebastien Paihole of Credit Agricole in the presence of Mohamed Fahmy, KHC chief financial officer.

“This transaction is the culmination of management efforts over the past three years to increase KHC’s recurring cash flow and profitability. Banque Saudi Fransi’s solid financial performance will have a positive impact on KHC’s financial results upon closing of the transaction”, said Fahmy.

Eng Al Maiman said the investment is a core step in balancing KHC’s portfolio. KHC has a long and successful track record investing in the banking sector internationally and was attracted to this investment given its unique value proposition.

KHC's strategy is to continue to adjust its portfolio to optimise the mix of income generating assets and growth investments, he said.

Commenting on this transaction, Prince Alwaleed Bin Talal, chairman of KHC, said: “Our investment in Banque Saudi Fransi demonstrates our core belief in the outlook for the Saudi economy underpinned by Vision 2030 and the National Transformation Plan."
 
The transaction is expected to close in the second half of 2017, subject to customary closing conditions including required regulatory approvals, the statement said. – TradeArabia News Service