First Abu Dhabi Bank (FAB), the UAE’s largest lender by assets, has signed an agreement to sell 60 percent of its stake in the payments business, Magnati, to Canada-based business services and industrials company, Brookfield Business Partners.
The deal with Brookfield results in an implied valuation of Magnati of up to $1.15 billion. This transaction follows the completion of the carve-out of Magnati announced in 2021. FAB will retain a 40 percent stake in Magnati post transaction and will continue its partnership via a long-term relationship agreement.
The carve-out of the payments business is part of FAB’s digital transformation process and was designed to enhance FAB’s position in the payments sector and unlock growth opportunities in new geographies and client segments.
The transaction is subject to customary closing conditions and regulatory approvals. Upon completion, proceeds from the sale will be used to support FAB’s growth and transformation plans.
Brookfield Business Partners is focused on owning and operating high-quality businesses with a track record of partnering with high-quality businesses and creating long-term value, representing a significant opportunity for both Magnati and the regional payments industry.
Magnati is the market leader for government solutions in the UAE and amongst the top two players across direct acquiring, prepaid issuing, and issuer processing. It aims to deliver its growth ambitions through its focused and agile model, underpinned by an intelligent payments platform that creates value for customers, government, merchants, and institutional clients.
Hana Al Rostamani Group CEO – FAB
“This announcement marks an important milestone and is the result of long-term planning to seek strategic partnerships to drive growth within the payments sector. Our partnership agreement with Brookfield will accelerate Magnati’s journey in a fast-paced and dynamic industry, creating broader value for all stakeholders.”
FAB’s expertise and relationships, coupled with Brookfield’s global presence will offer a wide platform for Magnati to attract new regional and international partners while setting a new standard for innovation and delivery in the payments industry. After the deal, Magnati will retain its headquarters in Abu Dhabi and the transaction will result in significant Foreign Direct Investment (FDI) into the UAE by a leading global asset manager.
Mr. Jad Ellawn, Managing Director at Brookfield, said, “We are pleased to partner with First Abu Dhabi Bank in charting the growth of Magnati. The payments industry is experiencing unprecedented growth, creating new opportunities for agile, pioneering payment platforms. As a preferred payments partner to leading organizations, Magnati is well placed to benefit from this shift. With this partnership, FAB and Brookfield will support Magnati’s vision of creating MENA’s leading payments platform.”
The transaction is subject to final regulatory clearance from the Central Bank of the United Arab Emirates (CBUAE). The American multinational investment bank, Morgan Stanley is acting as sole financial adviser to FAB, while UK-based Freshfields Bruckhaus Deringer acted as legal adviser to FAB on the transaction. US-based Cleary Gottlieb Steen & Hamilton acted as legal advisers to Brookfield.
