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The Saudi British Bank (SABB) announces the latest developments in relation to its proposed merger with Alawwal Bank

SAB 1060 18.57% 41.50 6.50

Further to the announcement made by SABB on the Tadawul website on 25 April 2017 in connection with a possible merger between SABB and Alawwal Bank, SABB confirms that discussions in relation to the possible merger are at an advanced stage and that the boards of SABB and Alawwal Bank have reached a preliminary, non-binding agreement on the share exchange ratio, subject to a number of important steps (including completion of confirmatory due diligence, finalisation of the merger agreement and agreement on a number of other commercial issues).

Based on this preliminary agreement, Alawwal Bank shareholders would receive 0.485 SABB shares for each Alawwal Bank share. Based on this exchange ratio and the closing price of SAR 33.5 per SABB share on 14 May 2018 (being the last trading day prior to the date of this Announcement), the merger would value each Alawwal Bank share at SAR 16.3 and Alawwal Bank existing issued ordinary share capital at approximately SAR 18.6 billion. This represents a premium of 28.5% to the Alawwal Bank share price as of 14 May 2018.

Should the merger proceed, it would represent an important transaction in the context of developing the Banking Sector of Saudi Arabia, this being a key objective of the Financial Sector Development Program under Vision 2030.

A binding agreement is yet to be entered into between SABB and Alawwal Bank. Any binding agreement to proceed with the merger will be subject to a number of conditions, including SAMA, other regulatory authorities, and the shareholders approval.

This transaction involves related parties, the details of which will be announced in due course.

This announcement does not mean that the proposed merger will be agreed between the two parties or that an offer will be eventually made by SABB to Alawwal Bank shareholders in relation to the proposed merger.

SABB does not expect that the proposed merger will, if completed, result in any involuntary layoff of employees.

Further announcements on relevant developments will be made in due course.

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