Kuwait Finance House “KFH” revealed its intention to issue 4.2 billion shares to finance the full acquisition of Ahli United Bank Bahrain, as part of a share exchange deal at the rate of one share of “KFH” shares, compared to 2.695 shares of the Bahraini bank, as the value of the deal is estimated at 11.6 billion. dollar.
According to KFH’s plan for the conditional acquisition of at least 90% of the capital of Ahli United Bank; Upon completion of the compulsory acquisition, the latter will become a wholly owned company of KFH, and Al Ahli United will submit a request to the Central Bank of Bahrain to delist it from the Bahrain Bourse in accordance with the terms of the chapter on control, merger and acquisition operations.
According to KFH’s announced plan, it aims, after the acquisition and the success of the deal, to transform the subsidiary of Ahli United Bank in Kuwait into a digital bank according to the request submitted to the Central Bank of Kuwait, in addition to KFH starting the legal merger procedures in order to merge its subsidiaries in Bahrain, namely: Al Ahli Bank The United and Baytak Bahrain.
KFH intends to work with a special strategy with Ahli United Bank after the compulsory acquisition, by starting the process of transforming the business of Ahli United Bank in Bahrain, Egypt, Iraq and the United Kingdom into Sharia-compliant businesses subject to the approval of the Central Bank of Bahrain.
This acquisition is expected to create a strong banking entity with a capital base of more than 10 billion dollars and assets equivalent to 121 billion dollars, and the deal will result in the birth of the seventh largest Gulf bank in terms of assets amounting to 115 billion dollars.
The capital base will enhance KFH's ability to finance infrastructure projects and mega oil projects through local banks and reduce dependence on foreign banks.
The acquisition will have a distinct geographic diversity, as it will operate in about 12 regional and international countries. It will also raise KFH's net profit in foreign or hard currencies from 19.8% to 39.6%, and KFH will raise the acquisition offer submitted to Ahli United Bank to 11.6 billion dollars from $8.8 billion.
KFH 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 two central banks of Kuwait and Bahrain gave the green light to the two parties to complete the deal, which includes stakes in Bahrain, Egypt, Libya, Iraq, Kuwait and Oman, and the bank's office in the Dubai International Financial Center.
