The acquisition will see Banque Audi purchase all Banque Saradar's shares through a $100 million cash payment and the issuance of paper equivalent to 9 per cent of the new entity. The paper issue is valued at $59 million. The transaction is based on a 1.36 times book value of Banque Saradar, and a 1.58 times book value of Banque Audi.

Even though the two entities will retain independent legal status and separate operations, significant corporate reshuffling will follow. Banque Saradar, which will become the group's private bank, will be renamed Banque Audi Saradar Private Bank, but will keep Mario Saradar as its chairman and managing director. He will also join the board of Banque Audi, and take over as chairman of Banque Audi (Suisse). Audi Investment Bankwill function as the group's corporate and investment banking arm, and Banque Audi will offer commercial and retail banking services.

A request to merge Banque Audi and Banque Saradar's respective affiliates in France will be submitted to Banque de France (central bank), with the formation of a new entity called Banque Audi Saradar (France) the objective.

The financial muscle of the new entity could support more aggressive regional expansion. Banque Audi has been looking at entering the recently-opened Syrian market, and may also consider other opportunities in the Levant (Banking, MEED Special Report, 5:9:03, pages 27-28).

The merger is awaiting approval from Banque du Liban (central bank).