Shuaa closes in on acquiring Kuwait’s Amwal

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 yesterday. 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, scaled back its operations as a result of the crunch, but recently said it wants to use acquisitions to resume growth.

As a three-year slump 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 they consolidate and regional governments issue debt or sell assets. 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 last year. 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 place the emphasis 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 Arabian and Egyptian operations.