Albert Momdjian: Calyon has been present in the region for the past 50 years with respect to corporate finance activities, and in particular in Saudi Arabia, Egypt and the Gulf (Bahrain, Dubai and Abu Dhabi). Since 2007, from our base in Dubai, we have been actively developing our investment banking and advisory businesses. The four major vectors of our growth are:

• Advisory services for foreign companies seeking local development through the purchase of assets and partnerships with local companies,
• Recycling of petrodollars and advice to local companies on using their surplus cash in the region by investing in French and other European companies,
• Capital markets activities such as Equity Capital Markets,
• M & A advisory and related services for regional companies.

A.M.: 2008 was full of successes: an advisory mandate for Emirates International Investment Company (EIIC) for the purchase of a 3% stake in Vivendi (USD 1.6 billion), an advisory mandate for Saudi Basic Industries Corporation (SABIC) for a USD 1.4 billion SukukIslamic Bond. Similar to an asset backed bond, Sukuk is a form of commercial paper that provides an investor with ownership in an underlying asset, and a return based on this ownership. The issuing entity needs to identify existing assets to sell to the Sukuk investors, via transference to an SPV.
The Sukuk investors then have a proportionate beneficial ownership in these assets. Investors typically take on the credit risk of the issuer rather than real asset risk on the assets owned by the SPV.
Sukuks can be listed and rated, though this is not necessary, depending on the target investor market. Sukuks are typically issued by corporate issuers, and some Financial Institutions, and also by Governments (Bahrain, Malaysia, Pakistan).
, the USD 1.9 billion initial public offering for Zain KSA (the biggest ever for Calyon outside France), advisory services for regional companies for local acquisitions, etc. One unquestionably high-profile transaction was Lafarge’s acquisition of the cement business of Orascom Construction Industries (OCI) for USD 15 billion, the biggest-ever M & A deal in the region.

François Vigne: Lafarge wanted to develop its business in the MENAMiddle East and North Africa region and complete a structurally important deal to confirm and strengthen its industry leadership.

A.M.: At the end of January 2007, we organized a visit to the region for Lafarge management and scheduled meetings with local investors. They greatly appreciated the quality of the meetings we organized and quickly recognized the region’s strong potential. At that point, thanks to our in-depth knowledge of local businesses, we approached one of our contacts who was open to either an acquisition or partnership arrangement, i.e. Orascom Construction Industries (OCI).

A.M.: Several factors made all the difference: the fact that the initiative for the project came from our teams; our professional relationship with the Sawiris family and in particular with Nassef Sawiris, the CEO of OCI; our presence in Egypt; and our knowledge of the markets where OCI operates.

F.V.: After analyzing the strategic objectives of both parties, we became convinced that a deal was possible and submitted the project to Lafarge. They gave us the mandate for three reasons; the fact that we were at the origin of the project, our closeness to the potential partner and the solid commercial relations at the highest level between Lafarge and Crédit Agricole.

F.V.: The deal was unanimously recognized by the profession and financial markets as the right deal for the right group at the right time. Calyon gained substantial visibility in the building materials sector and cemented its relationship with Lafarge. Calyon has become one of Lafarge’s leading bankers and has since obtained additional assignments.

A.M.: Locally, the deal strengthened the positioning of our teams and our expertise in the eyes of not only our clients but also our staff. Calyon was able to capitalize on its financing and advisory know-how, thus confirming the quality of our investments in the region. This success is helping us to win new mandates not only from Lafarge and sector companies but also throughout the MENA region. It also aptly illustrates the efficient interaction of our financing units, our Middle East staff and our senior banker for the greater benefit of the deal and the client.