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National Commercial Bank, Saudi Arabia’s largest lender by assets, agreed to buy rival Samba Financial Group for $15 billion in one of the biggest banking takeovers this year.
NCB agreed to pay 28.45 riyals ($7.58) for each Samba share on Sunday, valuing it at about 55.7 billion riyals. NCB will offer 0.739 new shares for each Samba share, at the lower end of the 0.736-0.787 per share ratio agreed when the banks signed an initial framework agreement in June.
The offer price is a 3.5% premium to Samba’s Oct. 8 closing price of 27.50 riyals and about 24% higher than the price the shares traded at before the talks were made public in June. The combined bank will have total assets of more than $220 billion and a market capitalization of $46 billion.
Bloomberg News first reported the merger talks in June.
- NCB’s existing shareholders will own 67.4% and Samba’s shareholders will own 32.6% of the combined entity
- Expects to unlock about 800 million riyals annually fully phased in cost synergies after integration
- Ammar AlKhudairy, current chairman of Samba, to become chairman of merged bank; Saeed Al Ghamdi, the current chairman of NCB, to become managing director and group CEO
- NCB advised by JPMorgan Saudi Arabia; Samba advised by Morgan Stanley Saudi Arabia
(Adds detail on exchange ratio in second paragraph and more details about the deal in bullets)