The Abu Dhabi three-way bank merger has been recommended unanimously to shareholders by the boards of Abu Dhabi Commercial Bank (ADCB) and Union National Bank (UNB).
Tuesday 29, January 2019 BY KUDAKWASHE MUZORIWA
The UAE banking sector is set to have a powerful new banking group following the decision by ADCB and UNB to merge and together acquire Al Hilal Bank.
In a joint statement, the banks stated that new banking group will carry the ADCB identity and Al Hilal Bank will retain its existing name, brand as well as operate as a separate Islamic banking entity within the group.
The tie-up will create the third largest bank in the UAE, with total assets of AED 420 billion and the third largest Islamic banking franchise in the country.
Eissa Mohamed Al Suwaidi, the Chairman-designate of the new banking group, said that this is a very exciting transaction that will create a larger, preeminent and resilient banking group.
The proposed transaction will be executed through a statutory merger. ADCB will issue 0.5966 ADCB shares for every UNB share, corresponding to a total of two billion new shares issued to UNB shareholders.
UNB shares will be delisted from the Abu Dhabi Securities Exchange (ADX) and the combined bank will retain ADCB’s legal registrations.
"The new bank is well-positioned to provide support for the UAE’s economic vision, and actively participate in the country’s growth and diversification,” added Ala’a Eraiqat, the Group Chief Executive Officer Designate.
Similarly, Al Hilal Bank will be acquired by the new entity, for approximately AED 1 billion by issuing a mandatory convertible note for up to 118 million post-merger ADCB shares to ADIC after the completion of the statutory merger.
The Government of Abu Dhabi, through the Abu Dhabi Investment Council (ADIC), will own 60.2 per cent of the combined bank, ADCB shareholders will own 28.0 per cent and UNB shareholders will own 11.8 per cent of the combined bank.