Diamond bank Plc has confirmed having merger talks with Access Bank Plc stating that the development is in the best interest of all stakeholders including, employees, customers, depositors and shareholders.
In a statement signed by Chioma Afe, Head, Corporate Communications of Diamond Bank, the lender said that 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.
Read the full statement below:
The Board of Diamond Bank Plc (āDiamond Bankā) today announces that following a strategic review leading to a competitive process, the Board has selected Access Bank Plc (āAccess Bankā) as the preferred bidder with respect to a potential merger of the two banks (āthe mergerā) that will create Nigeria and Africaās largest retail bank by customers.
The Board of Diamond Bank believes that the merger is in the best interest of all stakeholders including, employees, customers, depositors and shareholders and has agreed to recommend the offer to Diamond Bankās shareholders. Completion of the merger is subject to certain shareholder and regulatory approvals.
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.
Based on the agreement reached by the Boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of 2 New Access Bank ordinary shares for every 7 Diamond Bank ordinary shares held as at the Implementation Date.
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 (āNSEā) as of December 13, 2018, the date of the final binding offer.
Immediately following completion of the merger, Diamond Bank would be absorbed into Access Bank and it will cease to exist under Nigerian law. The current listing of Diamond Bankās shares on the NSE and the listing of Diamond Bankās global depository receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective.
Diamond Bank expects the transaction to complete in the first half of 2019.
Uzoma Dozie, the Chief Executive Officer of Diamond Bank, said: āThe proposed combination with Access Bank will create one of Africaās leading financial institutions.
There is clear strategic rationale for the proposed merger and strong complementarities between the two institutions.
While Diamond Bank has pioneered Nigeriaās largest technology-led retail banking platform, Access Bank is one of Nigeriaās leading full-service commercial banks.
Consolidation in the Nigerian banking industry is an inevitable, natural progression in a sector where the gap between Tier 1 and Tier 2 banks has been widening and scale has become critical; where technology will disrupt the traditional business model while enabling broader financial inclusion.
The board of Diamond Bank 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 more broadly.ā
Herbert Wigwe, CEO of Access Bank, said: āAccess Bank has a strong track record of acquisition and integration and has a clear growth strategy.
āAccess Bank and Diamond Bank have complementary operations and similar values, and a merger with Diamond Bank, 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.
āAccess Bank 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 banksā shared focus on innovation, financial inclusion and sustainability, can bring benefits to Access Bank and Diamond Bank customers, staff and shareholders.ā
Exotix Capital acted as international financial advisor to Diamond Bank, and Templars acted as Nigerian legal counsel.
