KHC to buy 16.2 % stake in BSF valued at $1.5bn

Eng. Talal Almaiman, KHC's CEO, signs the acquisition agreement with Sebastien Pailhole of Credit Agricole, in the presence of Mohamed Fahmi, KHC's CFO

RIYADH — Kingdom Holding Company (KHC) announced Tuesday it will acquire 16.2 percent stake in Banque Saudi Fransi for SR 29.5 per share, a deal with total consideration of approximately SR 5.8bn ($1.5bn), positioning KHC as the largest shareholder in the bank.

KHC will acquire the 16.2 percent stake from Credit Agricole Corporate and Investment Bank, the corporate and investment banking arm of Crédit Agricole S.A., 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.

“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”, said Mohamed Fahmy, KHC Chief Financial Officer.

KHC Chief Executive Officer Eng. Talal Al Maiman said the investment in the bank 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 compared to the sector. KHC's strategy is to continue to adjust its portfolio to optimize the mix of income generating assets and growth investments.

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".

The transaction is expected to close in the second half of 2017, subject to customary closing conditions including required regulatory approvals. — SG