National Commercial Bank (NCB) and Samba Financial Group (Samba) expect to finalize the planned merger in the second quarter of 2021, based on the expected timeline of the process.
Both banks also expected SAR 800 million in annual cost synergies, which will be realized in phases after the merger completion.
The cost synergies account for 9% of the two banks’ combined cost base, according to consolidated financial statements by the end of June 30, 2020. Moreover, the synergies will be realized through efficiency enhancement and economies of scale.
Revenue synergies are also forecast to be realized, while the merger’s non-cash costs are likely to hit nearly SAR 1.1 billion.
For the dividend distribution policy, NCB and Samba added that talks are ongoing in this regard, but no final agreement has been yet reached. Both management teams are looking into the optimal dividend distribution policy that serves the best interest of all relevant stakeholders.
NCB and Samba announced, today, Oct. 14, launching a joint website for the merger details.
Key merger details:
-An offer document as well as a shareholder circular will be published.
-Both banks will hold extraordinary general meetings (EGMs) to get shareholders’ approvals for the transaction.
-Following the announcement of the EGM decision, a 30-day creditors objection period will begin.
-The merger deal is expected to be legally finalized in H1 2021. NCB and Samba will continue to operate independently until the merger date.
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Merger Deal Timeline |
|
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June 25, 2020 |
Start of talks and the due diligence procedures |
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July 1, 2020 |
The due diligence procedures |
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Oct. 11, 2020 |
The signing of a binding merger agreement |
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Unspecified |
The EGM date |
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Expected in Q2 2021 |
Deal completion and close of merger |
NCB’s current chairman, Saeed Al-Ghamdi, commented: “Our ambition is to create a national champion that can facilitate the transformation envisaged under Vision 2030 and create a pioneer for next-generation banking services that nurtures tomorrow’s industry leaders.”
Elsewhere, Samba’s current chairman, Ammar AlKhudairy, said the merger will provide more opportunities to enhance support for clients, shareholders and the local community.
On Oct. 11, NCB and Samba entered into a legally binding merger agreement, Argaam reported.
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