NBAD and FGB shares rally ahead of shareholders’ meetings to approve merger

Shares of National Bank of Abu Dhabi (NBAD) and FGB rallied on Wednesday ahead of general assemblies for both banks today where shareholders are expected to approve a merger that will create the largest lender by assets in the Middle East.

NBAD shares jumped as high as 3 per cent as of midday in Abu Dhabi while shares of FGB advanced as much as 5.4 per cent.

NBAD, the biggest bank by assets in Abu Dhabi, and FGB, its closest competitor in the emirate, in October invited shareholders to separate general assembly meetings to approve their merger.

In July, the banks said 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$175bn in assets and come with many cost-cutting advantages.

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.

The Government of Abu Dhabi and related entities, which are among the shareholders, would have 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.

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