Saudi Arabia’s NCB in $15.6bn merger talks with rival Samba – The National

Saudi Arabia’s NCB in $15.6bn merger talks with rival Samba – The National

Saudi Arabia’s National Commercial Bank, the kingdom's biggest lender, entered into a framework agreement with Samba Financial Group, to explore a merger of the two lenders that could create the third-biggest banking entity in the Arab world by assets.n nA framework agreement signed on June 25 will pave the way for the start of a reciprocal due diligence process and provides an outline for the two lenders to negotiate definitive and binding terms for a potential tie-up, NCB and Samba said in separate statements to the Tadawul stock exchange, where their shares trade.n nThe principal terms agreed will see Samba shareholders receive between 0.736 and 0.787 newly-issued shares of NCB in exchange for each Samba share they hold.n nBased on the exchange ratio range, at a closing share price of 37.25 Saudi riyals (Dh36.48) per NCB share on June 24, the proposed deal would value Samba Financial Group share at between 27.42-29.32 riyals, a premium of 19.2 to 27.5 per cent above its closing price as of June 24, according to the NCB regulatory filing. This indicates NCB could pay between $14.62bn-$15.63bn to buy its rival.n nIf the two sides agree terms, NCB will be the merging bank and Samba