Saudi Arabia’s Kingdom Holding Company (KHC), run by Saudi billionaire Prince Alwaleed bin Talal, has agreed to acquire a 16.2% stake in Banque Saudi Fransi (BSF) for nearly SAR5.8bn ($1.5bn).
KHC will purchase the stake from Credit Agricole Corporate and Investment Bank (CACIB), a unit of France’s Credit Agricole. The deal dilutes CACIB’s BSF holding to 14.9%.
CACIB is also open to divest a further 5% stake in BSF, but is intend to retain a stake of at least 9.9% in the lender for a year post deal completion. Credit Agricole will also remain a strategic investor in BSF.
The transaction will boost Credit Agricole’s common equity Tier 1 (CET1) ratio by around 20 basis points, and the CET1 ratio of Credit Agricole Group by about 5 basis points, the French lender said in a statement.
The deal is anticipated to close in the second half of 2017, subject to regulatory nod.
KHC CFO Mohamed Fahmy said: “This transaction is the culmination of management efforts over the past 3 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.”