Kuwait Finance House (KFH) agreed to buy Bahrain’s Ahli United Bank (AUB) for about $11.6 billion, a deal almost four years in the making and one that ranks among the banking sector’s biggest this year.
The merger, a rare cross-border transaction in the Middle East, would create the Gulf’s seventh-largest bank, with $115 billion in assets.
KFH raised its acquisition offer to AUB from 8.8 billion to 11.6 billion dollars.
Under the revised terms, KFH would offer one share for every 2,695 AUB shares, including an offer to buy the share for $1.04, a 13 percent premium over Wednesday’s closing price.
According to a KFH statement to Boursa Kuwait, the merger was approved by the Central Bank of Kuwait (CBK), which had asked KFH to re-evaluate the deal in light of the outbreak of the pandemic in 2020.
In 2019, the initial offer was valued at $8.8 billion, with KFH proposing one share for every 2.32558 AUB shares.
According to Bloomberg, KFH shares have risen 66 percent since then, which raised the bank’s value to $25.8 billion.
AUB’s Bard has decided to accept the modified share swap ratio. “Accepting the above-mentioned share exchange ratio does not imply that (KFH) submitted an official takeover offer,” the bank added in a statement.
