JPMorgan sells 100% stake in Saudi Investment Bank for $203 million

Agreement, JPMorgan, Saudi Investment Bank, Saudi Arabia,
JPMorgan enters into an agreement to sell its entire stake in Saudi Investment Bank for $203 million.

In a strategic development Saudi Investment Bank announced that it intends to completely purchase JPMorgan International Finance Company’s stake in itself for $203 million.

On Sunday, the Saudi banked signed an agreement for purchasing JPMorgan International Finance Company’s full stake in itself which amounts to purchasing 56,245,350 shares representing 7.49% of its share capital for $ 3.6 per share.

The purchase of the stake is subject to regulatory approvals.

The Saudi Investment Bank made it clear that it does intend to slash its capital as a result of the deal and will instead retain the purchased shares as treasury shares and re-issue them to shareholders, at a later date, as a priority share.

It’s statement went on to add, it will seek to comply to all regulatory requirements to complete deal.

On its part, JPMorgan International Finance Company has stated it is selling its stake as part of a broader policy for divesting its non-core assets globally.

Although JPMorgan opened its direct office in Riyadh only in 2006, the U.S. New York-headquartered bank has had a long-standing presence in the Kingdom, albeit indirectly. Morgan Guaranty Trust Company had a presence in the Kingdom since 1933 and in the 1950s it was merged with JPMorgan to help U.S.-based oil companies to strengthen their operations in the kingdom.

Saudi Investment Bank’s association with JPMorgan started in 2000 when the U.S. bank merged with Chase Manhattan Bank. Incidentally, in 1977, Chase Manhattan Bank acquired a 20% stake in Saudi Investment Banking Corporation, which was formed to strengthen Saudi Arabia’s economy including its agricultural and industrial development.

Currently, JPMorgan is seen as taking an active role in advising Saudi Aramco on its initial public offer (IPO). It has also been a book runner when the Saudi government raised debt funds in 2017.

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