Al Salam, BMI in key merger agreement
Manama, September 8, 2013
Bahraini retail lender BMI said its board members have reached an agreement with Al Salam Bank-Bahrain, a dynamic, diversified and differentiated Islamic bank, to merge the two entities through a share swap deal.
The proposed merger will result in the group becoming the fourth largest commercial bank in Bahrain, according to a joint statement issued by both banks.
Announcing the decision on Sunday, the Bahraini banks said as per the new agreement 11 ASBB shares will be swapped in exchange for each BMI Bank share.
Under the terms of the proposed business combination, ASBB will acquire 58.5 million BMI Bank shares of BD1 ($2.63) each and issue 644 million ASBB shares of 100 fils each.
Commenting on the deal, Shaikha Hessa Bint Khalifa Al-Khalifa, the chairperson of ASBB said the proposed business combination if completed will result in the combined entity having 19 retail branches, including one overseas (Qatar), and 44 automated teller machines (ATMs).
It would enhance the visibility of ASBB and consolidate its retail/commercial banking in Bahrain while increasing its market share, she stated.
According to her, the offer is subject to approval by ASBB shareholders in their proposed Extraordinary General Assembly Meeting.
BMI chairman Sheikh Khalid bin Mustahail Al Mashani said: “Taking into consideration the saturated local market, consolidation becomes necessary in order to create larger and stronger financial institutions capable of competing both locally and regionally.”
ASBB is working closely with BMI Bank to accelerate the regulatory approval process and is drawing up a post-merger integration plan that best leverages the strength of the two banks.
"The combined entity would become an economically significant entity in the domestic market and position itself to expand regionally," stated Sheikh Khalid.-TradeArabia News Service