NIGERIA– Nigeria’s largest bank Access Bank Plc has announced that it has signed a Memorandum of Agreement (MoA) to merge its operations with mid-tier bank Diamond Bank Plc that will create Nigeria and Africa’s largest retail bank by customers.
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.
This follows its selection as preferred bidder after a competitive process undertaken by the Board of Diamond Bank.
Based on the agreement reached by the Boards of the two financial institutions, Diamond Bank shareholders will receive N3.13 per share, comprising a cash consideration of N1.00 per Diamond Bank Share representing a total cash amount of N23,160,388,968 or US$75,588,736.84 and the allotment of 6,617,253,991 new Access Bank ordinary shares, representing the 2 new Access Bank ordinary shares for every 7 Diamond Bank shares.
According to a statement, 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 as of December 13, 2018, the date of the final binding offer.
“Access has a strong track record of acquisition and integration and has a clear growth strategy. Access and Diamond have complementary operations and similar values, and a merger with Diamond, with its leadership in digital and mobile-led retail banking, could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion,” said Herbert Wigwe, CEO of Access Bank.
“Access has a strong financial profile with attractive returns and a robust capital position with 20.1% CAR as at 30 September 2018. We believe that this platform, together with the two banks’ shared focus on innovation, financial inclusion and sustainability, can bring benefits to Access and Diamond customers, staff and shareholders,” he added.
Uzoma Dozie, the CEO of Diamond Bank, said that he believes that the proposed combination of the two operations provides an exciting prospect for all stakeholders in both businesses and will create a financial institution with the scale, strength and expertise to capitalise on the significant opportunities in Nigeria and sub-Saharan Africa.
Access Bank is one of the major banks in Nigeria, plus extensive panAfrican operations including in Rwanda, Zambia, DRC, Ghana, Gambia and Sierra Leone, in addition to the UK.
The completion of a transaction would be subject to formal regulatory and shareholder approvals.