Kuwait Finance House (KFH) has raised its takeover bid for Bahrain's Ahli United Bank to $11.6 billion from $8.8 billion, and the merger will create a seventh largest A Gulf bank in terms of assets.


According to Arabiya Net, Finance House agreed to buy Ahli United Bank for about $11.6 billion, a deal that has been in preparation for nearly four years, and one of the largest deals in the banking sector this year.


The merger, cross-border in the Gulf region, will create the seventh largest bank in the Gulf, with assets of up to 115 billion dollars.


The Bahraini bank said that under the revised terms, KFH will offer one share in exchange for 2,695 shares in Ahli United.


This means that the offer price is $1.04 per share, which represents a premium of 13% to the stock's closing yesterday.


While the Central Bank of Kuwait agreed to the merger, which in 2020 asked the Kuwait Finance House to re-evaluate the deal with the spread of the epidemic.


The value of the initial offer in 2019 was estimated at $8.8 billion, with KFH offering one share for every 2.32558 shares in Ahli United.


Since then, KFH shares have risen 66%, valuing the bank at $25.8 billion.


Ahli United rose by 27% in the same period, giving the bank a market value of $10.3 billion.


Al-Ahly United said that its board of directors decided to accept the modified share swap ratio.


He explained in a statement, that accepting the swap factor does not mean that an official takeover offer was submitted by the Kuwait Finance House.


Junaid Ansari, Head of Investment Strategy and Research at Kamco Invest, said the deal would help improve costs in an increasingly competitive industry.


He said: The joint entity is expected to provide a great geographical diversity for KFH, in addition to a greater participation in state projects.


The deal comes in the wake of a series of mergers and acquisitions in the Gulf financial sector, where Al Rayan Bank and Al Khaleej Commercial Bank agreed to merge last year, to be one of the largest lenders in Qatar, while the Saudi National Commercial Bank bought Samba Financial Group in one of the largest banking acquisitions. for the year 2020.


Citigroup advises Ahli United, and HSBC and Credit Suisse previously also acted as corporate advisors.