First Abu Dhabi abandons EFG Hermes bid amid market turmoil

First Abu Dhabi Bank PJSC withdrew a bid to acquire a majority interest in Egyptian investment bank EFG-Hermes Holding SAE, amid global market uncertainty and volatile macroeconomic conditions.

First Abu Dhabi Bank, or FAB, is withdrawing its intention to submit a mandatory tender offer, as well as its request to start due diligence on EFG-Hermes, it told Egypt's Financial Regulatory Authority in an April 14 letter.

In February, FAB — the biggest bank by market cap in the United Arab Emirates — made a non-binding all-cash offer for at least 51% of EFG-Hermes for 19 Egyptian pounds per share. Had a deal come to fruition, it would have boosted FAB's banking activities in Egypt and in the Middle East and North Africa as a whole.

FAB also took over Bank Audi SAE, the Egyptian unit of Lebanon-based Bank Audi SAL, in 2021.

FAB faced new demands from the regulator regarding its EFG-Hermes bid, and would have been unable to close the deal within its set timeline, people familiar with the matter told Bloomberg News.

Egypt is still strategically important, FAB said in a statement to the Abu Dhabi Securities Exchange. The bank intends to continue discussions with regulators in the country on future opportunities, it told the FRA.

A spokesperson for EFG-Hermes declined to comment to Bloomberg.

As of April 13, US$1 was equivalent to 18.40 Egyptian pounds.