Mideast upstream oil and gas could lose $50bn of investment

Mideast upstream oil and gas could lose $50bn of investment

Mideast upstream oil and gas could lose $50bn of investment

RIYADH: The Saudi National Commercial Bank (NCB) is exploring a deal to acquire Samba Financial Group in what could be the Kingdom's biggest takeover this year.

The combined entity would control assets of some $214 billion.

NCB, the Kingdom's largest bank by assets, said it had entered into a framework agreement with Samba Financial Group "to negotiate definitive and binding terms of a potential merger of NCB and Samba Financial Group.“

The shareholders of Samba Financial Group would receive between 0.736 and 0.787 newly issued shares of NCB in exchange for every share they hold in Samba Financial Group, according to details of the proposed deal published on the Tadawul on Thursday.

The collapse of oil prices and the spread of the coronavirus pandemic is expected to trigger a wave of consolidation in the Gulf banking sector as lenders look to cut costs in response to a rapid economic slowdown. The Kingdom's central bank, the Saudi Arabian Monetary Authority, has already announced some $27 billion in stimulus measures to support banks.

Should the deal be completed as planned, it would value each Samba Financial Group share at between SR27.42 and SR29.32, which represents a premium