First Abu Dhabi Bank (FAB) today withdrew its offer to buy the Egyptian investment bank EFG Hermes.
FAB said in a press release that the decision followed consideration of the "context of ongoing global market uncertainty and volatile macro-economic conditions.”
The release added, “Egypt remains a strategically important market for FAB, where the bank will continue to support its customers and employees and continue to invest in the growth of its well-established partnerships and operations in Egypt.”
In February, FAB offered to buy EFG Hermes’ shares in cash for a minimum 51% stake in the company.
Why it matters: The news is a blow to Egypt’s efforts to attract foreign capital. Foreign investors have been selling Egyptian assets this year in response to the US Federal Reserve raising interest rates and uncertainty surrounding the war in Ukraine. Egypt’s Central Bank devalued the pound last month in response to the situation.
The war in Ukraine has hurt the Egyptian economy in several ways. Output in the non-oil sector has also fallen, the credit rating agency S&P Global said in a report last week.
Egypt is also now banking on Israeli tourists to make up the lost revenue from Ukrainian and Russian visitors due to the war.
What’s next: A researcher told Reuters today that FAB may offer to buy EFG Hermes in the future with a different valuation.