Bahrain’s United Gulf Bank has agreed to buy a stake in Dubai Islamic Bank unit Millennium Finance Corporation to help it expand in the Middle East, Africa and Asia.
United Gulf, a unit of investment firm Kuwait Projects Company (Kipco), did not disclose the size or value of the stake in a joint statement with Dubai Islamic, the Gulf’s third-biggest Islamic lender by market value.
Kipco, which owns stakes in about 50 companies and operates in 21 countries, said last week it wanted to expand into markets from Saudi Arabia to Algeria by investing in financial services firms.
The banks signed the Millennium deal on February 25, they said.
“With its regional experience in financial services, media and technology, Kipco will support Millennium Finance in its expansion plans across the Middle East, Africa and Asia,” Masaud Hayat, managing director of United Gulf, said in the statement.
Shares of United Gulf surged 6.58% on the Bahrain bourse on Sunday after news of the deal with Millennium, set up in 2006 to establish seven private equity funds investing in mainly unlisted firms in sectors from energy to telecoms.
Last year, Millennium was the sole financial adviser for Arcelor Mittal’s $2.2 billion African iron ore project.
United Gulf Assistant General Manager Shawki Khodr and Millennium Finance Chief Executive Keba Keinde declined to give details of the agreement when contacted by newswire Reuters.
Gulf Arab banks, buoyed by an economic windfall of record oil prices to Gulf oil producers, are looking outside their home markets, where greater competition is encouraging them to expand through acquisitions and branch expansion.
United Gulf planned to sell its stakes in several Arab commercial banks in deals worth more than $1 billion, Kuwait’s Al-Rai daily reported last week.
After the report, confirmed was in talks to sell part of its investments, but gave no further details. (Reuters)
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