QInvest and EFG Hermes have called off a joint venture that would have created the largest investment bank in the Middle East after failing to gain approvals from the Egyptian regulator.
The deal was intended to transfer ownership of Cairo-based EFG Hermes' three business lines – asset management, brokerage and investment banking – to a new entity based in Qatar and majority owned by QInvest.
But QInvest says the Egyptian Financial Supervisory Authority did not give the go ahead within the time limit for meeting the joint-venture conditions.
QInvest says the firms had received regulatory approvals in all other markets in which the joint venture was initially to operate including Qatar, the United Arab Emirates, Saudi Arabia, and Jordan.
Qatar-based QInvest, whose main shareholder is state-owned Qatar Islamic Bank, had hoped the deal would jump-start its growth in the region, according to its former chief executive.
For EFG Hermes, the deal offered the prospect of a wealthy partner to support the business amid difficult times. The company had seen its income fall 81% during 2011, as Egypt underwent a revolution to oust former president Hosni Mubarak.
QInvest says the companies remain open to cooperating “in a less structured framework”.
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