Qatar’s Masraf Al Rayan QSC agreed to purchase Al Khalij Industrial Financial institution PQSC in a share-swap deal value $2.2bn – marking the Center East’s first takeover deal this yr.
Masraf Al Rayan QSC agreed to purchase Al Khalij Industrial Financial institution PQSC in a share-swap deal that may create Qatar’s second-largest lender within the Center East’s first takeover of the yr.
Masraf Al Rayan pays a 21% premium to Al Khalij’s closing share on Tuesday, and can situation 0.5 securities for each Al Khalij share, the lenders mentioned in a press release on Thursday. The deal is valued at 8.2 billion riyals ($2.2 billion), in keeping with Bloomberg knowledge.
Taking on smaller rival Al Khalij will see Masraf Al Rayan leapfrog its subsequent two largest opponents giving it $47 billion in belongings – nonetheless six instances lower than that of Qatar Nationwide Financial institution QPSC. Qatar has 2.5 million individuals being served about 20 native and worldwide banks, leaving smaller lenders at an obstacle except they will discover a area of interest or aggressive edge.
The mix will “create a bigger and stronger monetary establishment with a robust monetary place and important liquidity obtainable to assist Qatar’s financial progress,” the lenders mentioned. The merger can even lead to price financial savings and income synergies.
Ali Bin Ahmad Al Kuwari will develop into chairman and Sheikh Hamad Bin Faisal Bin Thani Al-Thani will develop into vice chairman of merged entity. The chief committee of the board will likely be chaired Sheikh Hamad Bin Faisal Bin Thani Al-Thani.
Shares of Masraf Al Rayan gained 1.2% 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 looking for to construct scale to deal with the fallout of decrease oil costs and the financial havoc attributable to the coronavirus pandemic.
The spate of enormous transactions has helped consolidate a fragmented trade. Saudi Arabia’s largest lender, Nationwide Industrial Financial institution, final yr purchased Samba Monetary 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.