Kuwait Finance House buys Bahrain’s Ahli United Bank for $11bn

Kuwait Finance House buys Bahrain’s Ahli United Bank for $11bn

Kuwait Finance House (KFH), a pioneer in the Shariah-compliant banking, has agreed to buy Ahli United Bank, a regional bank based in Bahrain, for about $11.6 billion.

This potential merger, a rare cross-border deal in the Middle East, would create the Gulf’s seventh-largest lender with $115 billion in assets. Under the revised terms, KFH will offer one share for every 2.695 shares of Ahli United Bank, implying an offer price of $1.04 per share.

Kuwait’s central bank, which in 2020 asked KFH to reassess the deal as the pandemic spread, has approved the combination. The initial offer in 2019 was valued at $8.8 billion, with KFH offering 1 share for every 2.32558 shares in Ahli United Bank.

Since then, KFH shares have risen 66 percent, valuing the lender at $25.8 billion. Ahli United Bank is up 27 percent in the same period, giving the bank a market value of $10.3 billion. Lenders in the oil-rich region are starting to combine locally after the twin shocks of lower energy revenues and the pandemic, and a spate of large transactions has helped consolidate a fragmented industry.

Last Year, Masraf Al Rayan and Al Khalij Commercial Bank agreed to combine, creating one of Qatar’s largest lenders, while