Global ecommerce and technology giant Amazon has agreed to invest in Egyptian financial services group EFG Hermes as part of a wider partnership with its consumer finance unit valU.
valU Consumer Finance S.A.E., a fully owned subsidiary of EFG Hermes Holding S.A.E., has entered into an agreement with Amazon for the provision of consumer financing as a payment method on Amazon’s Egyptian platform.
Under the terms of the agreement, valU will make some of its consumer financing products available to customers on the ecommerce platform, providing these customers the option to split the total cost of purchases into multiple payments by using valU.
EFG Hermes and Amazon have also entered into an option agreement whereby the American firm has agreed to acquire $10 million in the Egyptian company’s GDRs with the option to replace that investment into valU at a future date.
The deal imputes a post-money valuation of valU of $235 million based on a stake of 4.255% of the issued share capital of valU.
Amazon can exercise the option before or upon the occurrence of a liquidity event at the level of valU. Such an event could be in the form of an independent investment involving third-party investors, a sale, or an initial public offering.
EFG Hermes says it has grown over 38 years to transform from a pure-play investment bank in MENA into an impact-driven universal bank in Egypt.
It offers advisory, asset management, securities brokerage, research and private equity to the entire region and in its home country. Its operations also cover microfinance, leasing, factoring, Buy-Now Pay-Later, digital payments, mortgage finance and insurance. It has a presence in Egypt, the UAE, Saudi Arabia, Kuwait, Oman, Jordan, Pakistan, UK, Kenya, US, Bangladesh, Nigeria and Vietnam.
Last year, EFG Hermes partnered Egypt’s wealth fund to ink a $242 million control deal for Arab Investment Bank that gave it commercial banking products and services.
Meanwhile, the latest development comes as at a time when First Abu Dhabi Bank has made a $600 million bid for a majority stake in EFG Hermes.