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NCB signs binding merger agreement to take over Samba

NCB signs binding merger agreement to take over Samba
The merger will create a regional powerhouse with SAR 837 billion ($223 billion) in assets
SAMBA
1090
4.62% 38.50 1.70
Default Company
1180.O
0.00% 0.00 0.00

Riyadh – Mubasher: The National Commercial Bank (NCB) has entered into a legally binding merger agreement with Samba Financial Group to take the necessary steps to implement a merger between the two banks.

The completed transaction involves a merger by NCB to Samba. Under the deal, shareholders of Samba will receive 0.739 new NCB shares in exchange for every share they hold in Samba, according to a bourse statement on Sunday.

The new shares will be issued by way of a capital raise, which will increase the paid-up capital of NCB by 49.3% from SAR 30 billion to SAR 44.780 billion and the number of its issued shares will increase from 3 billion shares to 4.478 billion.

Based on the exchange ratio and the closing price of SAR 38.50 per NCB share on 8 October 2020, each Samba share is valued at SAR 28.45 and Samba’s issued ordinary share capital at approximately SAR 55.7 billion.

On completion of the merger, NCB’s existing shareholders will own 67.4% and Samba’s shareholders will own 32.6% of the merged bank. The substantial shareholders of the merged bank will be the Public Investment Fund (PIF) (37.2%), the Public Pension Agency (7.4%), and the General Organisation for Social Insurance (GOSI) (5.8%).

The merger will create a regional powerhouse with SAR 837 billion ($223 billion) in assets, uniquely positioned to accelerate the transformation of Saudi Arabia’s banking landscape and deliver progress towards Vision 2030.

“Saudi Arabia is undergoing a historic transformation with Vision 2030. Such a transformation requires a robust financial services sector, especially highly capitalised, resilient banks that can fund economic development, as well as support Saudi Arabia’s trade and capital flows with the region and the rest of the world,” said NCB’s current chairman, Saeed Al Ghamdi.

Moreover, Samba’s current chairman, Ammar AlKhudairy, remarked: “Our merger with NCB will create a universal bank – a local leader and a regional powerhouse that aims to unlock considerable value for shareholders, provide exceptional banking services for the people of Saudi Arabia and help local entrepreneurs capitalise on opportunities for domestic and international business growth.”

On 25 June 2020, the two lenders signed a framework agreement to begin a due diligence process and negotiate the terms of a potential merger.

Earlier, the Saudi Stock Exchange (Tadawul) suspended trading the shares of the two companies for one trading session pending a material disclosure.