ADCB, UNB and Al Hilal Bank merger to create UAE’s third-largest lender

The merged banks will retain the Abu Dhabi Commercial Bank identity. (Reuters)

• ADCB and UNB informed the bourse last week that their respective boards would meet Tuesday to discuss updates on the potential merger
• ADCB and UNB’s shares are traded in the Abu Dhabi bourse

DUBAI: Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank on Tuesday have agreed on a three-way merger to create the third-largest bank in the UAE with assets worth $114.36 billion.
“The transaction, which has been recommended unanimously to shareholders by the boards of ADCB and UNB, is subject to regulatory and shareholder approvals to be sought in the coming weeks,” a statement the Abu Dhabi Securities Exchange said.
“The new banking group will carry the ADCB identity and will continue to benefit from strong institutional backing, through the Government of Abu Dhabi’s majority ownership. Al Hilal Bank will retain its existing name and brand and operate as a separate Islamic banking entity within the group.”
ADCB is the largest in the three-way tie-up, with the lender and UNB both majority owned by government investment fund Abu Dhabi Investment Council (ADIC). The two banks’ shares are traded in the Abu Dhabi bourse. Al Hilal is wholly-owned by ADIC, which is now part of Mubadala Investment Company.
ADCB and UNB informed the bourse last week that their respective boards would meet Tuesday to discuss updates on the potential merger.
Under the transaction, ADCB will issue 0.5966 ADCB shares for every UNB share, which is equivalent to a total of 1,641,546,697 new shares issued to UNB shareholders. Upon effectivity of the merger, UNB shares would be delisted from the Abu Dhabi stock exchange.
Al Hilal meanwhile would be acquired by the combined banks for approximately $272.29 million with the issuance to ADIC of a mandatory convertible note for up to 117,647,058 post-merger ADCB shares after the completion of the statutory merger.
With the combined entity, the Abu Dhabi government will hold 60.2 percent interest, through ADIC, while other ADCB shareholders will own 28 percent while UNB shareholder will have 11.8 percent of the merged banks.
Eissa Mohamed Al-Suwaidi was named chairman of the new banking giant, while Mohamed Bin Dhaen Al-Hamli was appointed vice chairman.