National Bank of Abu Dhabi, the biggest bank by assets in the emirate, and FGB have separately invited shareholders to a general assembly on December 7 to approve their merger.
NBAD and FGB said in July that their boards had unanimously voted to recommend to their shareholders a merger of the two Abu Dhabi-listed banks in what would create a lender with US$175 billion in assets, the largest in the Middle East.
The banks are proposing that the deal be done through a share swap in which FGB shareholders will receive 1.254 NBAD shares for each FGB share. That gives FGB shareholders a 3.9 per cent discount based on the closing share prices on June 30.
Under the proposed terms, FGB shareholders would own about 52 per cent of the combined bank and NBAD shareholders the balance.
It would leave the Government of Abu Dhabi and related entities with a 37 per cent interest in the bank.
Shares of FGB would be delisted and the merged bank would be called National Bank of Abu Dhabi.
Even though NBAD, the biggest bank by assets in the emirate, has made headway in building its consumer banking business in recent years, it would get a boost from joining forces with FGB, which has more loans to individuals on its books.
FGB’s retail book is about 40 per cent of its total loans, while NBAD’s consumer lending portfolio makes up just 17 per cent of its outstanding loans.
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