Masraf Al Rayan QSC agreed to buy Al Khalij Commercial Bank PQSC in a share-swap deal that will create Qatar’s second-largest lender in the Middle East’s first takeover of the year.
Masraf Al Rayan will pay a 21% premium to Al Khalij’s closing share on Tuesday, and will issue 0.5 securities for every Al Khalij share, the lenders said in a statement on Thursday. The deal is valued at 8.2 billion riyals ($2.2 billion), according to Bloomberg data.
Taking over smaller rival Al Khalij will see Masraf Al Rayan leapfrog its next two largest competitors by giving it $47 billion in assets -- still six times less than that of Qatar National Bank QPSC. Qatar has 2.5 million people being served by about 20 local and international banks, leaving smaller lenders at a disadvantage unless they can find a niche or competitive edge.
The combination will “create a larger and stronger financial institution with a strong financial position and significant liquidity available to support Qatar’s economic growth,” the lenders said. The merger will also result in cost savings and revenue synergies.
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