SAAB And Alawwal Bank’s Merger To Create Third-Largest Listed Bank In Saudi Arabia
After a year of talks, Saudi British Bank (SAAB) and Alawwal Bank have reached a preliminary, non-binding agreement to merge through the share exchange ratio. Based on this agreement, Alawwal Bank shareholders would receive 0.485 SABB shares for each Alawwal Bank share depending on this exchange ratio and the closing price of SAR 33.5 per SABB share at the last trading day prior to the date of this announcement. SAAB, which is backed by HSBC, will offer to pay 28.5% premium to the Alawwal Bank, by valuing Alawwal Bank’s share price at SAR 16.3 and by valuing Alawwal Bank’s existing issued ordinary share capital at approximately SAR 18.6 billion (around $5 billion). The proposed merger between SABB and Alawwal Bank would create the kingdom’s third-largest listed bank in terms of assets, profits and revenues. The two banks generate collectively $76.7 billion in total assets, while revenues around $3.4 billion, and profits about $1.4 billion, according to the financial statements of the two banks in 2017.