BEIRUT: All hurdles except one have been cleared in the pending acquisition of Standard Chartered’s retail operations in Lebanon by Cedrus Invest Bank, a source involved in the negotiations told The Daily Star Friday.
Over three months of negotiations, the two companies have managed to settle terms on price, taxes and hundreds of technical issues, but the fate of Standard Chartered’s employees remains an issue of contention holding back a final deal.
“Standard Chartered is negotiating with their staff on the proper compensation scheme once the retail business is sold to Cedrus,” the source said. “But these talks have lasted longer than expected.”
He added that according to the agreement, it was up to Standard Chartered to compensate any employees who do not want to be part of Cedrus.
London-based Standard Chartered has 100 employees in Lebanon.
Cedrus has expressed interest in keeping some of the Standard Chartered employees, while the rest are to receive a compensation package from London.
The source declined to predict when the talks between Cedrus and Standard would be concluded but stressed that the most difficult parts had been resolved.
Cedrus, which is mainly specialized in management of funds and wealth, is keen to expand its business to commercial banking.
Standard Chartered has decided to sell its retail operations in Lebanon as part of efforts to pull back from emerging markets.
The bank has three branches and a license to open two more. Standard Chartered will keep a representative office in Beirut once the sale of the retail business is complete.
Both sides have refrained from giving details about the talks but sources estimated the deal at around $24 million-$27 million.
Central Bank governor Riad Salameh told The Daily Star earlier that he had no objection to an investment bank acquiring a commercial bank in Lebanon.
The Central Bank must approve any bank merger or acquisition before the concerned parties sign an agreement.