Crédit Agricole sells final Saudi Fransi stake, with Clifford Chance advising

Clifford Chance and its Saudi associate firm are advising France’s Crédit Agricole as it disposes of its final remaining stake in Banque Saudi Fransi.

Crédit Agricole announced the transaction on 28 September, adding it had already obtained regulatory approval.

It said two unnamed institutional investors related to the Saudi government had purchased its 4% stake in Banque Saudi Fransi (BSF) for 1.4 billion Saudi riyals (€332 million) – a price of 30 riyals (€6.8) per share.

Clifford Chance and Abuhimed al-Sheikh al-Hagbani (AS&H), its local partner, advised Crédit Agricole on the transaction, while JP Morgan acted as financial advisor alongside Crédit Agricole CIB, the bank’s investment banking division.

Crédit Agricole said move had a “positive impact” of around five basis points on its phased-in CET1 ratio compared to the end of Q2, and four basis points on the wider group’s ratio.

The transaction marks the final step in Crédit Agricole’s lengthy exit from BSF, in which it at one point had a 31.1% stake.

In 2019 it sold 6% of BSF to an investment vehicle owned by US private equity fund Ripplewood, and 4.9% to a consortium led by the same fund earlier in the year. In 2017 it sold 16.2% to Kingdom Holding Company, an investment vehicle controlled by Saudi prince Al-Waleed bin Talal.

Clifford Chance and AS&H acted for Crédit Agricole in all those transactions. The BSF matter is the second major banking market transaction the pair have worked on in Saudi Arabia this year, after advising on the merger between Saudi banks National Commercial and Samba Financial Group in June.

Crédit Agricole CIB is currently applying for a licence to operate in Saudi capital markets, and the bank has emphasised that it is not intending to exit the Saudi market in spite of its exit from BSF.

CIB chief executive Jacques Ripoll pointed to the Saudi government’s ‘Vision 2030’ strategy to diversify the country’s economy away from the oil and gas sector.

“Crédit Agricole CIB remains highly confident in Saudi Arabia’s economic perspectives, in the wake of Vision 2030, and plans to further develop its direct presence to extend its activities in the country,” he said.

Counsel to Crédit Agricole

  • Clifford Chance
  • Abuhimed al-Sheikh al-Hagbani

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