Italy’s Intesa Sanpaolo Group is reportedly in advanced talks with cash-strapped Egypt to acquire the remaining 20% of the Bank of Alexandria (AlexBank) it does not own as the North African country seeks to raise cash after its financial markets suffered heavy foreign investment outflows last year.
Earlier this month, Egypt unveiled plans to sale government stakes in 32 companies including Banque du Caire, United Bank of Egypt and Arab African International Bank. However, AlexBank is not on the list.
Egypt sold 80% of AlexBank for $1.6 billion to Sanpaolo IMI in a major privatisation deal in 2006. Sanpaolo IMI would merge with Banca Intesa the following year to create what is now Italy’s largest banking group.
Sources told Reuters that an Egyptian court is expected to rule on a long-standing legal challenge against the original sale to Intesa before a takeover can go through, with one of them saying a decision will likely come as early as 25 February.
The Egyptian Center for Transparency mounted a legal challenge against the sale over a decade ago, claiming that the government had agreed to sell the stake at a price below the bank’s market value.
Intesa Sanpaolo owns 80% of AlexBank after buying back in 2020 a 9.75% stake it had sold to International Finance Corporation in a deal that was reportedly valued at $161.8 million. AlexBank is one of Egypt’s main private sector banks with 175 branches and 1.6 million customers.
