Diamond, Access Bank to conclude merger mid-2019
The Board of Diamond Bank Plc has said that it expects to conclude the transaction of its proposed merger with Access Bank Plc in the first half of 2019.
“Diamond Bank expects the transaction to complete in the first half of 2019,” it said in a statement on Monday.
The bank said that following a strategic review leading to a competitive process, the board had selected Access Bank as the preferred bidder with respect to a potential merger of the two banks that would create Nigeria and Africa’s largest retail bank by customer base.
It stated, “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 of N1.00 per share in cash and 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 N0.87 per share of Diamond Bank on the Nigerian Stock Exchange as of December 13, 2018, the date of the final binding offer.
“Immediately following completion of the merger, Diamond Bank would be absorbed into Access Bank and it will 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.”
In the same vein, Access Bank said in a statement that it signed a Memorandum of Understanding with Diamond Bank regarding a potential merger of the two banks.
The Chief Executive Officer, Access Bank, Herbert Wigwe, who disclosed that the banks signed a Memorandum of Understanding, said, “Access has a strong track record of acquisition and integration and has a clear growth strategy. Access and Diamond have complementary operations and similar values, and a merger with Diamond Bank, 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 has a strong financial profile with attractive returns and a robust capital position with 20.1 per cent CAR as at 30 September 2018. We believe that this platform, together with the two banks’ shared focus on innovation, financial inclusion and sustainability, can bring benefits to Access and Diamond customers, staff and shareholders.”
The Chief Executive Officer, Diamond Bank, Uzoma Dozie, said, “The proposed combination with Access Bank will create one of Africa’s leading financial institutions. There is a 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 banks. 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 inclusion.”
However, the National President, Association of Senior Staff of Banks, Insurance & Financial Institutions, Oyinkan Olasanoye, said that from the report it was getting, the merger was expected to lead to a bigger and broader bank.
She noted that Access Bank had always been a reliable part of ASSBIFI but Diamond Bank was not.
But with the new plan, she added, Diamond Bank would become part of the union.
She said, “So we are monitoring closely what the management plans to do but at present, we know that there is none of our members that will need to lose their job that will not follow due process.
“But at present, we have written the management to register our interest and I know that the new management of Access Bank will get across to us, telling us the implication on the workforce.”
Commenting on the development, the Head, Banking and Finance Department, Nasarawa State University, Prof Uche Uwaleke, described the merger as a positive development for the banking sector.
“By this merger, Access Bank has emerged as one of the biggest banks in Africa by customer base. The scheme of the merger is a win-win for the shareholders of the two banks.
“The purchase consideration is fantastic at over N3 per share for a target bank whose share price is less than N1 per share.”