Diamond Bank Plc has confirmed a merger and acquisition process with Nigeria's tier-1 bank, Access Bank Plc.

The bank in a statement issued by Uzoma Uja, Company Secretary/Legal Adviser, on Monday, December 17, 2018, believed that the merger is in the best interest of all stakeholders including, employees, customers, depositors and shareholders and has agreed to recommend the offer to Diamond Bank’s shareholders.

ALSO READ: Access Bank confirms takeover of Diamond Bank for over $90 million

The statement reads:

“The Board of Diamond Bank Plc (“Diamond Bank”) today announces that following a strategic review leading to a competitive process, the Board has selected Access Bank Plc (“Access Bank”) as the preferred bidder with respect to a potential merger of the two banks (“the merger”) that will create Nigeria and Africa’s largest retail bank by customers.

The Board of Diamond Bank believes that the merger is in the best interest of all stakeholders including, employees, customers, depositors and shareholders and has agreed to recommend the offer to Diamond Bank’s shareholders. Completion of the merger is subject to certain shareholder and regulatory approvals.

The proposed merger would involve Access Bank acquiring the entire issued share capital of Diamond Bank in exchange for a combination of cash and shares in Access Bank via a Scheme of Merger. Based on the agreement reached by the Boards of the two financial institutions, Diamond Bank shareholders will receive a consideration of N3.13 per share, comprising of N1.00 per share in cash and the allotment of two (2) New Access Bank ordinary shares for every seven (7) Diamond Bank ordinary shares held as at the Implementation Date.

The offer represents a premium of 260% to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange (“NSE”) as of December 13, 2018, the date of the final binding offer. Immediately following completion of the merger, Diamond Bank would be absorbed into Access Bank and it will cease to exist under Nigerian law.

The current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depository receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective. Diamond Bank expects the transaction to be completed in the first half of 2019. We will keep the market updated with any new development."

Dozie

In another regulatory filing by Access Bank Plc, Uzoma Dozie, CEO of Diamond Bank, said, "The Proposed combination with Access Bank will create one of Africa's leading financial institutions. There is a clear strategic rationale for the proposed merger and strong complementarities between the two institutions. While Diamond Bank has pioneered Nigeria's largest technology-led retail banking platform, Access is one of Nigeria's leading full-service commercial banks.

Consolidation in the Nigerian banking industry is an inevitable, natural progression in a sector where the gap between Tier-1 and Tier-2 banks has been widening and scale has become critical; where technology will disrupt the traditional business model which enabling broader financial inclusion."

“Access has a strong track record of acquisition and integration and has a clear growth strategy. Access and Diamond Bank have complementary operations and similar values, and a merger with Diamond, with its leadership in digital and mobile-led retails banking, could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion,"a statement from Herbert Wigwe, CEO Of Bank, reads in part.

herbert-ceo

The completion of the transaction, the two banks said would be subject to formal regulatory and shareholder approvals.

Citi Global markets limited and Chapel Hill Denham acted financial advisers to Access bank while Banwo & Ighodalo acted as legal advisers to Access Bank.

Meanwhile, Business Insider's analysis of the deal shows that it worth more than $90 million. The move, analysts say, may make Access Bank Nigeria's largest bank by customer size and capital base.