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Abu Dhabi, UAEWednesday 26 September 2018

Shuaa to hold 87% stake in Kuwait's Amwal investment bank after acquisition 

Shuaa says Amwal shareholders representing 70.9% stake in the company agree to sell their shares 

Shuaa Capital is expanding its operations through acquisitions. Pawan Singh / The National
Shuaa Capital is expanding its operations through acquisitions. Pawan Singh / The National

Shuaa Capital’s plans to acquire Kuwait’s Amwal International Investment Company moved one step forward after Amwal shareholders, who collectively own a 70.9 per cent share, agreed to sell their stake.

Dubai's Shuaa Capital will hold 87.22 per cent of Amwal after the acquisition is completed, the investment company said in a statement to the Dubai Financial Market on Sunday. The transaction is pending confirmation from Kuwait’s regulatory authorities.

“Such numbers remain subject to the final review from the Kuwait Clearing Company and confirmation from the Capital Markets Authority in Kuwait,” the company said.

Shuaa, once among the region's top investment banks before the global financial crisis hit a decade ago, shrunk its operations as a result of the crunch but recently said it wants to use acquisitions to resume growth. As a three-year low in oil prices slowed Arabian Gulf economies, big mergers and acquisitions, rather than organic growth, have been one way for companies to take investment banking opportunities as companies consolidate and regional governments issue debt or sell assets.

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Read more:

Shuaa swings to profit in fourth quarter thanks to turnaround strategy

Shuaa Capital confirms talks to acquire extra shares in Kuwait's Amwal

Shuaa abandons talks to acquire Global stake

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In January, Shuaa said it was negotiating an initial agreement to acquire Amwal after buying an 8 per cent stake in the Kuwaiti investment bank last year.

Shuaa has been in expansion mode since returning to profitability in 2017. Shuaa Capital, which counts Abu Dhabi Financial Group as its biggest shareholder, said last month it is seeking a license to add investment and initial public offering management in the UAE to its list of services. ADFG said its strategy to revive Shuaa would focus on growing its assets under management, leveraging its balance sheet and increasing its business in Saudi Arabia and Egypt.

Shuaa had previously looked to invest in Kuwaiti bank Global Investment House and Bahrain’s GFH, but both attempts were abandoned last year.

The company is gearing up to distribute its first dividend in a decade following a 21 per cent year-on-year increase in second-quarter net income, boosted by strong growth in its Saudi Arabia and Egypt operations.

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