KUWAIT: Kuwait Finance House (KFH) has agreed to purchase Bahrain’s Ahli United for approximately $11.6 billion.
The deal, which has been in the works for nearly four years, would be among the largest in the banking sector this year.
As a rare cross border deal in the Middle East, it would create the Gulf’s seventh-largest lender with $115bn in assets.
KFH will offer one share for every 2.695 shares of Ahli, implying an offer price of $1.04 per share, a 13% premium to the stock’s Wednesday close.Kuwait’s central bank, which had asked KFH to reconsider the deal during the pandemic in 2020, approved the purchase on Wednesday.
The initial offer in 2019 was worth $8.8 billion, with KFH offering one share for every 2.32558 Ahli shares.
KFH’s shares have risen 66% since then, valuing the lender at $25.8 billion. Ahli is up 27% in the same period, giving the bank a market value of $10.3 billion.
Lenders in the region are starting to combine locally after the twin shocks of lower energy revenues and the pandemic.