BREAKING: Saudi banks reach preliminary merger agreement

16 May 2018
Merger terms will require regulatory approvals before being finalised

Saudi British Bank (Sabb) has confirmed that merger talks with local firm Alawwal Bank are at an advanced stage and that the boards of directors of both banks have reached a preliminary, non-binding agreement on the share exchange ratio.

Sabb first announced the possible merger on the Tadawul website on 25 April.

Based on the initial agreement, Alawwal Bank shareholders will receive 0.485 SABB shares for each Alawwal Bank share.

“Based on this exchange ratio and the closing price of SR33.5 ($8.9) per SABB share on 14 May 2018 … the merger would value each Alawwal Bank share at SR16.3 ($4.3) and Alawwal Bank existing issued ordinary share capital at approximately SR18.6bn ($4.9bn),” the statement said, citing that the offered value represents a premium of 28.5 per cent to the Alawwal Bank share price as of 14 May 2018.

The agreement is subject to a number of important steps including completion of confirmatory due diligence, finalisation of the merger agreement, and agreement on a number of other commercial issues, Sabb said in a statement.

The merger will also require multiple regulatory approvals, including from the Saudi Arabian Monetary Authority (Sama), before it is finalised.

Further announcements on relevant developments will be made in due course, Sabb said.

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