The management of Diamond Bank on Monday announced its merger with Access Bank.A statement by Uzoma Uja, the bank’s Secretary/Legal Adviser, said the transaction will be completed by the first half of 2019.
We presents to you ten things to note about the deal and the banks involved:
1. Access Bank is not new to merger and acquisition. Beginning 2011 and effectively in 2012, Access Bank took over the defunct Intercontinental Bank Plc. Although the integration was alleged to be riddled with controversies as reports said over a thousand staff of Intercontinental Bank were laid off during the process, the bank emerged stronger and bigger after the acquisition.
2. With the new merger, both banks (Access and Diamond) hope to leverage on their distinct potentials to build a stronger bank. Access Bank boss, Herbert Wigwe, said both banks have complementary operations and similar values, and a merger with Diamond Bank, with its leadership in digital and mobile-led retail banking, could accelerate Access’ strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion.
3. The merger, the banks hope, will create Nigeria and Africa’s largest retail bank by customers.
4. The Board of Diamond Bank said it 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.
5. The merger has however not been completed. The bank said the completion of the merger is subject to certain shareholder and regulatory approvals.
6. Access Bank says it has a strong financial profile with attractive returns and a robust capital position with 20.1 per cent CAR as at September 30, 2018.
7. The proposed merger would involve Access 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.
8. Based on the agreement reached by the boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of two (2) New Access Bank ordinary shares for every seven (7) Diamond Bank ordinary shares held as at the implementation Date. The offer represents a premium of 260% to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange (“NSE”) as of December 13, 2018, the date of the final binding offer.
9. Also important is that 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.
10. The new transaction is expected to be completed in the first half of 2019.