Kuwait Finance House (KFH), a pioneer in the Shariah-compliant banking, has agreed to buy Ahli United Bank, a regional bank based in Bahrain, for about $11.6 billion.
This potential merger, a rare cross-border deal in the Middle East, would create the Gulf’s seventh-largest lender with $115 billion in assets. Under the revised terms, KFH will offer one share for every 2.695 shares of Ahli United Bank, implying an offer price of $1.04 per share.
Kuwait’s central bank, which in 2020 asked KFH to reassess the deal as the pandemic spread, has approved the combination. The initial offer in 2019 was valued at $8.8 billion, with KFH offering 1 share for every 2.32558 shares in Ahli United Bank.
Since then, KFH shares have risen 66 percent, valuing the lender at $25.8 billion. Ahli United Bank is up 27 percent in the same period, giving the bank a market value of $10.3 billion. Lenders in the oil-rich region are starting to combine locally after the twin shocks of lower energy revenues and the pandemic, and a spate of large transactions has helped consolidate a fragmented industry.
Last Year, Masraf Al Rayan and Al Khalij Commercial Bank agreed to combine, creating one of Qatar’s largest lenders, while Saudi Arabia’s National Commercial Bank bought Samba Financial Group in one of the biggest banking takeovers of 2020.
HSBC Holdings, a British multinational universal bank and financial services holding company, and Credit Suisse Group, a Swiss leading financial services company, have been the advisers on the KFH deal.
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