Burgan Bank to Acquire 100% of United Gulf Bank
Deal News | Dec 27, 2024 | Zawya
Burgan Bank, one of Kuwait's prominent financial institutions, has obtained the necessary approval from the Central Bank of Kuwait (CBK) to acquire a 100% stake in United Gulf Bank (UGB), based in Bahrain. The deal is valued at $190 million, reflecting a 1.0x multiple on UGB's book value. This acquisition marks a strategic move for Burgan Bank as it seeks to diversify its revenue streams and leverage UGB's assets, including its 60% stake in Kamco Investment Company. The transaction, expected to close by Q1 2025, aligns with Burgan Bank's asset reallocation strategy and aims to strengthen its presence across the GCC region. The acquisition's completion will also affect Burgan's regulatory capital ratios, impacting them by 60 to 70 basis points. The Group CEO of Burgan Bank, Tony Daher, emphasized the benefits of this acquisition in terms of providing access to new platforms and expanding the bank's footprint. This strategic initiative was facilitated by approvals from both Bahraini and Kuwaiti central banking authorities.
Sectors
- Banking
- Financial Services
Geography
- Kuwait – Burgan Bank, the acquiring institution, is based in Kuwait, and the Central Bank of Kuwait is a significant regulatory authority involved in the approval process.
- Bahrain – United Gulf Bank, the target company, is headquartered in Bahrain, reflecting the cross-border nature of this transaction within the GCC.
Industry
- Banking – The article discusses a significant acquisition within the banking sector, involving institutions in the Gulf Cooperation Council (GCC) region.
- Financial Services – United Gulf Bank holds a stake in Kamco Investment Company, highlighting the role of financial services in this acquisition.
Financials
- $190 million – The purchase price for acquiring a 100% stake in United Gulf Bank.
Participants
| Name | Role | Type | Description |
|---|---|---|---|
| Burgan Bank | Bidding Company | Company | A major Kuwaiti bank acquiring a 100% stake in United Gulf Bank. |
| United Gulf Bank (UGB) | Target Company | Company | A conventional wholesale bank based in Bahrain being acquired by Burgan Bank. |
| Central Bank of Kuwait (CBK) | Regulatory Authority | Government | The regulatory body that provided final approval for the acquisition. |
| Kamco Investment Company | Asset | Company | UGB has a 60% stake in this investment company, which is part of the acquisition. |
| Tony Daher | Group CEO | Person | The Group CEO of Burgan Bank, who provided statements on the strategic rationale behind the acquisition. |
| Central Bank of Bahrain | Regulatory Authority | Government | Provided no-objection to the acquisition process involving a Bahraini company. |