Kuwait Finance House (KFH) has agreed to buy Bahrain’s Ahli United for about $11.6 billion – almost four years after the transaction was first announced.
The deal, which is about to be one of the biggest in value in the banking sector this year, will effectively create the Arabian Gulf’s seventh-largest lender with $115 in combined assets, Bloomberg has reported.
The Kuwaiti lender will offer one share for every 2.695 shares of Ahli United, implying an offer price of $1.04 per share, according to the revised terms.
In 2019 when the acquisition was first announced, the value of the transaction stood at $8.8 billion. The following year saw Covid-19 tearing through global economies, resulting in the Kuwait’s central bank telling KFH to reassess the deal.
Mergers and acquisitions in the Middle East’s banking sector have gained traction in recent years – mainly driven by economic pressure due to lower energy revenues and the impact of the pandemic.
Recent transactions include the merger of Qatar’s Masraf Al Rayan and Al Khalij Commerical Bank last year, which resulted in the creation of one of the country’s biggest lenders.
In 2020, two major banks in Saudi Arabia have merged as well, creating the Saudi National Bank with a market value of $82 billion.
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