The board of Diamond Bank Plc on Monday finally announced its merger with Access Bank Plc expected to be completed in first half of 2019.
The News Agency of Nigeria reports that both banks recently denied media reports of any merger.
Uzoma Dozie, the bank’s Chief Executive Officer, said in Lagos the board had selected Access Bank as the preferred bidder with respect to a potential merger of both banks.
Mr Dozie said the potential merger of the two banks would create Nigeria and Africa’s largest retail bank by customers.
He added that the transaction to be completed in the first half of 2019 was in the best interest of all stakeholders.
Mr Dozie said the completion of the merger was 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 N1 per share in cash,” he said.
Mr Dozie also said the transaction would include the allotment of two new Access Bank ordinary shares for every seven Diamond Bank ordinary shares held as at the implementation date.
“The offer represents a premium of 260 per cent to the closing market price of 87k per share of Diamond Bank on the Nigerian Stock Exchange (NSE) as of Dec. 13, 2018, the date of the final binding offer,” Dozie said.
He said the bank’s shares would be absorbed into Access Bank at the completion of the merger and Diamond Bank would cease to exist under Nigerian law.
“The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective,” he added.
Mr Dozie said the proposed combination with Access Bank would create one of Africa’s leading financial institutions.
“The board of Diamond Bank believes that the proposed combination of the two operations provides an exciting prospect for all stakeholders in both businesses, he said.
Herbert Wigwe, Access Bank the Chief Executive Officer, said: “Access Bank has a strong track record of acquisition and integration and has a clear growth strategy.
“Access 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’
“This could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion,” said Mr Wigwe.