Access Bank has formally announced the signing of a Memorandum of Agreement (MoA) with Diamond Bank regarding a potential merger of the two banks. The new merger is expected to form Nigeria’s and indeed Africa’s largest retail bank by customer size.
According to Access Bank, its choice as a referred bidder came after a competitive selection process undertaken by the Board of Diamond Bank Plc.
Details of the MoA
- The proposed merger would involve Access Bank acquiring the entire issues share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger.
- Based on this agreement by the boards of the two financial institution, Diamond Bank shareholders will receive N3.13 per share.
- This will comprise a cash consideration of N1.00 per Diamond Bank share representing a total cash amount of N23.16 billion or $75.58 million.
- The allotment of 6.62 billion new Access Bank ordinary shares, representing the 2 new Access Bank ordinary shares for every 7 Diamond Bank shares. 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 as of December 13, 2018.
If you are a shareholder in Diamond Bank you can calculate what your total share will be after the merger by clicking here.
However, the completion of the transaction would be subject to formal regulatory and shareholder approvals.
Reactions by the Diamond Bank CEO
Commenting on the new development, Uzoma Dozie, CEO, Diamond Bank, said the proposed combination with Access Bank will create one of Africa’s leading financial institution.
According to him
“There is clear strategic rationale for the proposed merger and strong complementarities between the two institutions. While Diamond Bank has pioneered Nigeria’s largest technology-led retail banking platform, Access Bank is one of Nigeria’s leading full service commercial bank. 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 institution”
Also Commenting on the new MoA, Herbert Wigwe, CEO of Access Bank, noted the strong track record of acquisition and integration and has a clear growth strategy.
According to him
“Access Bank and Diamond have complementary operations and similar values and a merger with Diamond 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. Access Bank has a strong financial profile with attractive returns and a robust capital position with 20.1 CAR as at 30 September 2018.”
Diamond Bank was incorporated on December 20, 1990 and began operation as a private limited liability company on March 21, 1991.
Access Bank was listed on the Nigerian Stock Exchange in 1998 with its Bond instrument listed on the Irish Stock Exchange in 2016.