Absolutely fabulous. Well for UAE’s First Abu Dhabi Bank that is. FAB has banked a tidy sum after selling a 60% stake in its digital payment firm Magnati to Canada’s Brookfield Business Partners. The deal supposedly values the firm at $1.1b, approximately netting FAB a cool $690m. The I’s and T’s still need to be dotted and crossed, but the deal sees the bank retain 40% as well as continuing their long-term relationship. The funds will go towards supporting FAB’s growth and transformation plans.
The plan is to tap into FAB’s localized expertise and contacts alongside Brookfield's global presence to help build Magnati into a bigger star in the payments industry. Magnati is already the market leader for government solutions in the UAE and amongst the top two players across direct acquiring, prepaid issuing, and issuer processing. “Our partnership agreement with Brookfield will accelerate Magnati’s journey in a fast-paced and dynamic industry, creating broader value for all stakeholders.” boasted Hana Al Rostamani, group chief executive officer of FAB.
Why it matters
The Covid-19 pandemic accelerated the global appetite for digital payments. It came as an increasing number of people began to use digital payment services for online banking and e-commerce transactions. Globally, digital payments are expected to grow to $8.26 trillion by 2024, from $4.4tn in 2020, according to Statista.
