Qatar financial institution agrees to $2.2bn takeover deal
Qatar’s Masraf Al Rayan QSC agreed to purchase Al Khalij Commercial Bank PQSC in a share-swap deal price $2.2bn – marking the Middle East’s first takeover deal this yr.
Masraf Al Rayan QSC agreed to purchase Al Khalij Commercial Bank PQSC in a share-swap deal that can create Qatar’s second-largest lender within the Middle East’s first takeover of the yr.
Masraf Al Rayan pays a 21% premium to Al Khalij’s closing share on Tuesday, and can problem 0.5 securities for each Al Khalij share, the lenders stated in a press release on Thursday. The deal is valued at 8.2 billion riyals ($2.2 billion), in keeping with Bloomberg knowledge.
Taking over smaller rival Al Khalij will see Masraf Al Rayan leapfrog its subsequent two largest rivals by giving it $47 billion in property – nonetheless six occasions lower than that of Qatar National Bank QPSC. Qatar has 2.5 million folks being served by about 20 native and worldwide banks, leaving smaller lenders at an obstacle except they’ll discover a area of interest or aggressive edge.
The mixture will “create a larger and stronger financial institution with a strong financial position and significant liquidity available to support Qatar’s economic growth,” the lenders stated. The merger can even lead to value financial savings and income synergies.
Ali Bin Ahmad Al Kuwari will turn into chairman and Sheikh Hamad Bin Faisal Bin Thani Al-Thani will turn into vice chairman of merged entity. The government committee of the board will likely be chaired by Sheikh Hamad Bin Faisal Bin Thani Al-Thani.
Shares of Masraf Al Rayan gained 1.2% by the shut on Thursday, whereas Al Khalij’s inventory rose 2.8%.
Masraf Al Rayan and Al Khalij began talks in June final yr amid a wave of financial institution consolidations within the Gulf’s monetary trade. Lenders are in search of to construct scale to deal with the fallout of decrease oil costs and the financial havoc brought on by the coronavirus pandemic.
The spate of huge transactions has helped consolidate a fragmented trade. Saudi Arabia’s largest lender, National Commercial Bank, final yr purchased Samba Financial Group for $15 billion in one of many greatest banking takeovers of 2020.
JPMorgan Chase & Co. is monetary adviser to Al Rayan and Al Khalij.
