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CBQ to borrow $800m to buy UAE bank

DUBAI/MANAMA — Commercial Bank of Qatar is borrowing $800 million to help fund its acquisition of the United Arab Bank of the United Arab Emirates, two bankers involved in the transaction said yesterday.

Commercial Bank said last month it had won initial approval from the central bank to buy 40 per cent of the UAE lender for $601 million.

"It's for general corporate activities and partly to finance the acquisition of United Arab Bank," one banker said in Dubai.

A second bank confirmed the information to Reuters in Bahrain. Both asked not to be identified.

The loan would be a "club deal" they said, meaning it would be financed by lenders directly involved in the transaction rather through syndication to other banks.

Nine banks are involved in the deal including Barclays Plc, JPMorgan Chase & Co, ABN Amro and BNP Paribas, the bankers said. Commercial Bank's chief executive officer, Andrew Stevens, declined to comment to Reuters.

The United Arab Bank purchase would be the biggest ever for Commercial Bank, which bought a 34 per cent stake in National Bank of Oman in 2005.

United Arab has nine branches, including three in Dubai and one in Abu Dhabi, according to its Web site. The lender is based in Sharjah, the third-largest member of the UAE federation.