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Deal: Access Bank to merge with Diamond Bank to form Nigeria’s largest bank

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Access Bank CEO, Herbert Wigwe

It was celebrations galore at Access Bank over the weekend as the Nigerian Tier 1 bank hosted its annual Xmas party for staff, business partners and friends of the bank. The annual event themed “Havana Nights” is one of the most sought-after corporate Xmas parties and lived up to its billing.

In attendance were the bank’s top echelon including the Managing Director of the bank Herbert Wigwe. As a plethora of top artists including the likes of Tiwa Savage, Burna Boy, Wizkid and Mayorkun wowed fans with their on-stage performances, negotiations for a merger between Access Bank and Diamond Bank reached closing stages. Top executives of both banks had just hammered out what sources termed the key commercial terms of a potential merger that could usher in one of the largest banks in sub-Saharan Africa.

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The celebrations continued into Sunday as Access Bank hosted the Born in Africa Concert at Eko Atlantic City. Guests seated at the VVIP (Very very important personality)  section of the packed event were seen clinking glasses as they cheered on to another blockbuster merger that is set to make Access Bank the largest bank in Nigeria by asset base. As the clock ticked towards midnight, local media had picked up the cheering news. Finally, Access Bank will be acquiring (or merging with) Diamond Bank.

Sprawling rumours now confirmed.

Rumours of a potential merger deal surfaced a few weeks back to the shock of the investing community. However, both banks issued statements denying that any merger talks were ongoing. Despite the denials, people familiar with the transaction inform Nairametrics that the deal was never off the table and had been going on for weeks. Both sides had already facilitated the presence of a due diligence team from one of the big three audit firms.

According to a source, a board meeting was held over the weekend approving the merger terms after weeks of negotiations surrounding several aspects of the transaction. Both banks are now expected to formally seek a shareholder agreement before applying for the approval of the CBN and Securities & Exchange Commission.

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What next?

There is still a long way to go before this deal will be completed. Nairametrics believes the following set of activities will take place before Access Bank merges with Diamond Bank.

Formal Announcement – We expected a formal announcement to be made via the Nigerian Stock Exchange in the early morning of trading. Typically, deals like this are announced on the stock exchange before a board approval of announced. It appears negotiations had ensued without the knowledge of the stock exchange.

Shareholder Approval – Following the approval of the board of directors of both banks, an extraordinary general meeting of shareholders of the banks will be held respectively. At the meeting, shareholders of both banks will be expected to grant their consent.

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Regulatory approval – The approval of the Central Bank of Nigeria will have to be obtained. Whilst we do not see any potential snag, the apex bank will still need to confirm if depositors funds are not in anyway in danger of being impacted by this transaction. The Security and Exchange Commission, SEC, will also be required to approve the transaction in line with its extant laws. SEC will review the impact on shareholders value before an approval is received.

Further negotiations continue – The banks will continue to negotiate other aspects of the deal such as the offer price, asset valuations, board memberships, employee to be sacked or retained etc.

As midnight approached, the party had just begun at the Access Bank sponsored Born in Africa concert. The night is bound to be a very long one as other major Nigerian artists such as Davido, Tiwa Savage etc. were yet to perform. Event attendees are in for a long and enjoyable night and have nothing to worry about except to savour the moment. Same can be said of Access Bank as they look forward to an eventful week of anouncement what is arguable the biggest merger in over a decade in Nigeria.

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Patricia

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

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Hospitality & Travel

Passengers can now arrive 90 minutes before departure for domestic flights – FG

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international passengers, Coronavirus: FG enforces immediate screening of travellers at airports with new directive

The Federal Government has announced the reduction of arrival time for passengers from three hours to one hour and a half before departure for domestic flights.

This was disclosed in a tweet post by the Minister for Aviation, Hadi Sirika, through his Twitter handle on Monday, July 13, 2020.

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The minister said that the decision was arrived at after they have reviewed passenger facilitation at the airport while noting that passengers should check-in online.

In the tweet post, Sirika said, ‘’My colleagues and I have reviewed passenger facilitation at our airports, consequently I am happy to announce that, henceforth travellers are to arrive one hour and half before their departure time for domestic flights. Travellers are advised to check-in online, please.’’

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It can be recalled that the Federal Airports Authority of Nigeria (FAAN) had earlier in June issued flight resumption protocol for both international and local passengers across the country, advising passengers to arrive at the airport three hours before their time due to the new COVID-19 safety checks for domestic flight operations and five hours for international flight operations.

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Economy & Politics

Seyi Makinde Proposes N3 billion investment plan for water supply

The local governments in Oyo are advised to submit a list of 10 faulty boreholes in the LG. 

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Seyi Makinde Proposes N3 Billion plan for water supply

The Governor of Oyo State, Seyi Makinde announced the proposal of a N3 billion investment plan dedicated to water supply in rural and urban areas of the state.

Speaking through the Chairman of Rural Water Supply and Sanitation Agency (RUWASSA), Mr. Najeem Omirinde in Ibadan on Monday, he added that N500 million of the N3 billion would be used for repairing broken and faulty state-owned boreholes.

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All Chairmen of each of the Local Governments in Oyo are advised to submit a list of 10 faulty boreholes in the Local governments.

The Oyo State governor also ordered that all new boreholes must be compliant with solar-powered pumps, to enable their longevity and save costs.

Urging residents to patronize the agency if they need to dig up boreholes for water, citing that it would be cheaper if done through the state agency than with private drilling companies.

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Minister of Finance, Zainab Ahmed stated last year that Nigeria needs an estimated N36 trillion annually for the next 30 years to solve Nigeria’s infrastructure problem. The investment, although a tiny fraction of what Nigeria needs is a bold step by the Oyo State government.

 

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Economy & Politics

FG asks UK court for more time to appeal $9.6 billion arbitration judgement

Malami stated that the Evidence of P&ID’s highly orchestrated scam had only recently come to light. 

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FG asks UK court for more time to appeal $9.6 billion arbitration judgement

The Federal Government has approached a UK court to appeal for more time to appeal the $9.6 billion arbitration award against it over the breach of contract with Process & Industrial Development (P&ID) Ltd.

Nigeria has said that it needs more time to pursue its argument that the 2010 gas supply contract with Process & Industrial Development Ltd was a sham.

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The legal dispute with P&ID is coming against the backdrop of the huge drop in the country’s revenue due to the collapse in oil prices globally. Nigeria had applied to US courts in March seeking for documents from 10 banks which includes Citigroup Inc. and JPMorgan Chase & Co, in a bid to prove its corruption allegations.

P&ID, however, has denied any wrongdoing in the whole transaction, arguing that Nigeria missed its opportunity to appeal.

The Nigerian Lawyer, Mark Howard, on Monday, the first morning of a 2-day hearing, said ‘’It is very unusual in a fraud case to discover a single smoking gun. By its very nature, fraud is conducted in secret, which makes it hard to detect and justifies an extension.’

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READ MORE: The effect of the United States’ Shale Oil on Nigeria?

The legal representatives for Nigeria are seeking another hearing for the judge to decide whether any misconduct has taken place and whether it justifies overturning the contract

The Attorney General and Minister for Justice, Abubakar Malami in a statement said, ‘’Evidence of P&ID’s highly orchestrated scam had only recently come to light.’’

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It can be recalled that last year, a UK judge upheld an earlier arbitration award to P&ID, which had accumulated to about $9.6 billion. The arbitration decision was over a failed contract to build a gas processing plant in the Southern city of Calabar.

The Nigerian lawyers disclosed that they have uncovered alleged bribes to government officials and their family members dating back to 2009.

Malami in his court filing on March 24, submitted that ‘’There is good reason to believe that ministers at the highest level were involved in a corrupt scheme to steal money from Nigeria.’’

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