Egyptian Billionaire Swoops for New York’s Auerbach Grayson

  • Naguib Sawaris plans to create ‘Egypt’s largest player’
  • Sawiris’ Beltone ID buying control of U.S.-based brokerage

Billionaire Naguib Sawiris has stepped up efforts to create one of the largest financial advisory firms in Egypt with the purchase of a 51 percent stake in New York-based brokerage Auerbach Grayson & Co.

The acquisition by Sawiris’s Beltone Financial Holding will give the Egyptian investment bank and asset manager more access to the U.S. “in addition to boosting our expansion plans in frontier markets,” Beltone Chairman Sameh El-Torgoman said in a statement late on Wednesday. Beltone didn’t disclose the terms of the transaction, which is expected to be completed in the coming weeks.

The deal comes as Sawiris is being frustrated in his attempt to buy Commercial International Bank Egypt’s investment-banking arm, CI Capital. The 924 million Egyptian-pound ($104 million) acquisition has been repeatedly delayed by regulators in what Sawiris suggests is an example of political vendettas against him. The stock exchange canceled all Thursday trades on Beltone’s shares after they surged 10 percent.

The U.S. purchase “comes as a surprise to us as CI Capital, which they are seeking to acquire, already has a foreign institutional platform,” Allen Sandeep, the Cairo-based director of research at Naeem Holding, said in a phone interview.

‘End Game’

Sawiris’ Orascom Telecom Media & Technology SAE bought Beltone last year. Betting on a recovery of the Egyptian economy, he said in an interview in March that “the end game is definitely to create the largest player in Egypt”.

Egypt’s government plans to sell shares in banks and other companies to stimulate the market and revive sentiment hurt by a dollar shortage that’s hindering economic growth. The government in February cut economic growth forecast from 5 percent to 4.4 percent in the current fiscal year ending June.

In a challenge to Egypt’s largest investment bank, EFG-Hermes Holding, Sawiris’ wants to create a company that controls about 25 percent of brokerage business in Egypt and to expand regionally and internationally. Sawiris had two failed attempts to buy EFG-Hermes in 2012 and 2014.

Beltone’s board in May approved a 1 billion Egyptian-pound rights offer to be used to finance acquisitions. Regulators have yet to sign off on the capital increase.

Before it's here, it's on the Bloomberg Terminal.