MON, DECEMBER 17 2018-theG&BJournal-Access Bank and Diamond Bank jointly announced today a N23.1 billion all-stock merger agreement that potentially could create the biggest bank in Nigeria and Africa’s largest retail bank by customers. Access Bank’s shares traded 6.04% up at N7.9 by mid-day today after the executives of both banks officially confirmed the signing of a Memorandum of Agreement (MoA).
The tie-up between them is probably the last in a very shortlist of M&A deals in 2018, which has been a ‘dry’ year for mergers and acquisition in the Nigeria.
Access Bank management unveiled the details of the deal which will involve the bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a scheme of merger. Diamond Bank will receive N3.13 per share comprising a cash consideration of N1.00 (one Naira) per Diamond Bank share representing a total cash amount of N23.160, 388,968(bn) or $75,588,736.84(mn) and an allotment of 6,617,253991(Bn) new Access Bank ordinary shares, representing the 2 new Access Access Bank ordinary shares for every 7 Diamond Bank shares.
“The offer represents a premium of 260% to the closing market price of N0.87 per share of Diamond on the Nigerian Stock Exchange as of December 13 2018, the date of the final binding offer,’’ Access Bank said.
Completion of the merger is subject to certain shareholder and regulatory approvals, according to Diamond Bank.
The Board of Diamond Bank Plc say they believes that the merger is in the best interest of all stakeholders including, employees, customers, depositors and shareholders and has agreed to recommend the offer to Diamond Bank’s shareholders.
Immediately following completion of the merger, Diamond Bank would be absorbed into Access Bank and it will cease to exist under Nigerian law. The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective. Diamond Bank expects the transaction to be completed in the first half of 2019.
‘’We will keep the market updated with any new development.’’
‘’We believe that this platform, together with two banks’ shared focus on innovation, financial inclusion and sustainability, can bring benefits to Access and Diamond customers, staff and shareholders,’’ Herbert Wigwe, CEO of Access Bank said.
Uzoma Dozie, the CEO of Diamond Bank said there is a clear strategic rationale for the proposed merger and strong complementarities between the two institutions.
Citigroup Global Markets Limited and Chapel Hill Denham acted as Financial Advisers to Access Bank while Banwo &Ighodalo, acted as legal advisers to Access Bank Bank.
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