Kuwait-based The International Investor (TII)has signed an agreement with McKinsey & Company of the US to provide advisory services for the proposed merger of TII with some of the Islamic banking units of the Saudi-owned Dallah Al-Baraka Group (DBG - MEED 20:7:01).
A joint TII-McKinsey task force will be set up to maximise the business potential and determine shareholder value of the new Islamic financing group to be formed. 'We view it [the appointment of McKinsey] as the critical first step in our challenging journey,' says Adnan al-Bahar, TII's chief executive officer.
The joint task force will define a value creation plan, which will include revenue performance, cost reduction, market competitiveness, product diversity, complementary skills and capabilities and geographic focus.
The project will also cover corporate strategy, corporate governance, financial control, organisational structure and IT and operations.
Through a combined cash and paper deal, TII will be acquiring DBG's stakes in nine Middle East and African banks.
TII will be staging a capital increase to part-finance the transaction, through which DBG will acquire a 35.5 per cent stake in TII. The cash element of the deal is made of up of two parts: an initial consideration of $87 million will be paid, followed by a deferred disbursement of $76.2 million, subject to TII's share price (MEED 22:6:01).