One of the biggest mergers in the history of Lebanon’s banking sector seems set to proceed, with the agreement of the board of directors of Lebanon Invest to the planned purchase of their bank by Banque Audi. The next step in the process will be the meeting of the general assemblies of both organizations in December, where approval is expected. A green light is also required from the Lebanese central bank.
The merger represents the fusion of one of Lebanon’s largest commercial banks—Banque Audi—and one of only investment banks operating in the country. According to the Daily Star, Banque Audi is expected to buy Lebanon Invest with newly issued shares, although a certain amount of capital might also change hands. With Lebanon Invest expected to largely conserve its existing share capital, the deal is valued at about $40 million.
Talks between the two institutions began about a year-and-a-half ago, and an agreement was signed in September 1999 to cooperate in areas such as research and corporate financing. A memorandum of understanding regarding the merger itself was concluded about two months ago. Marwan Ghandour, Lebanon Invest’s chairman and general manager already sits on the board of Banque Audi and Banque Audi chairman Raymond Audi sits on the board of directors of Lebanon Invest.
Both institutions have been coming off less than sterling business periods. Banque Audi reported earlier consolidated net profits in the first nine months of 2000 of $27.8 million, which were 7.1 percent below the amount for the same period in 1999. Lebanon Invest reported a net loss of $3.1 million in 1998 and a net profit of $1.3 million 1999.
Banque Audi traces its origins back to Sidon in South Lebanon, where Hanna Audi inherited his father's foreign exchange business in 1930. The first branch of the bank was established in Beirut in 1938, and the bank was incorporated under its present form in 1962, when its shareholder base was opened up to Lebanese and other Arab nationals. The group expanded abroad during the 1970s, when it established affiliates in Switzerland, France, Luxembourg and the United States.
The Lebanon Invest Group was founded in 1994, with the aim of offering innovative financing and advisory services in Lebanon and the region. Based in Beirut, it provides an institutional link between investment opportunities in Lebanon and other Middle Eastern countries and institutions and high net-worth individuals throughout the world. The bank provides a wide range of investment and financial services that now should complement Banque Audi’s activities in the commercial banking sector. —(Albawaba-MEBG)
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