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Beltone to jettison Auerbach stake this year
Posted on Monday, 13 January 2020 15:53
Egyptian securities brokerage Beltone Financial intends to offload its majority shareholding in US peer Auerbach Grayson later this year, according to the company’s chief executive.

Speaking to Reuters, Ibrahim Karam said the 60.0 per cent stake will be divested in order to help the group return to profitability.

The executive noted that plans are expected to be set in stone by March of this year and that the board had given him the authorisation to press ahead with the process.

Karam said that although Auerbach gives Cairo-headquartered Beltone a presence in over 120 markets, it results in significant losses for the firm.

He also went into some detail on the group’s other plans for 2020, saying it intends to enter Gulf and African countries while simultaneously expanding its non-banking financial activities and managing the listing of a large private company in Egypt.

Karam specifically named the UAE and Saudi Arabia as countries the firm hopes to enter this year, saying it will have a different model in the latter in a bid to avoid the mistakes made by other companies there.

He also told Reuters that Beltone is aiming to have non-banking financial activities account for between 30.0 per cent and 40.0 per cent of revenues for the next three years.

The Egyptian company has owned 60.0 per cent of Auerbach since October 2016, when it bought the holding for an undisclosed consideration.

Beltone was established in 2002 and claims to be one of the fastest-growing investment banks in the Middle East, as well as a leading provider of financial services in the region.

The company employs almost 300 people at offices in New York, Riyadh, Dubai, Doha and Tripoli, among other locations.

There were 307 deals targeting securities brokerages announced worldwide in the whole of 2019, according to Zephyr, the M&A database published by Bureau van Dijk.

Of these, the largest by some distance was the Charles Schwab Corporation’s USD 26.00 billion acquisition of TD Ameritrade, via its Americano Acquisition Corporation vehicle, which was signed off in November.

© Zephus Ltd