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Clifford Chance in cooperation with AS&H is advising on the first ever statutory merger in Saudi Arabia

9 October 2018

Clifford Chance in cooperation with AS&H is advising on the first ever statutory merger in Saudi Arabia

Proposed US$5 billion merger between Saudi British Bank and Alawwal Bank marks an important milestone for public listed companies in the Kingdom.

Clifford Chance in cooperation with Abuhimed Alsheikh Alhagbani Law Firm (AS&H) is advising the Saudi British Bank (SABB) on its proposed merger with Alawwal Bank. 

A binding merger agreement was entered into on 3 October 2018. The proposed merger, which is subject to shareholder and regulatory approvals, would create the third-largest bank in Saudi Arabia with total assets of approximately US$77 billion.

The Financial Sector Development Programme is one of the central strategic pillars of Vision 2030. The proposed merger will deliver a bank that is large, ambitious, innovative and strong, an example of the type of institution that will enable Vision 2030 to become a reality.

The combined bank will be a leader in corporate banking, foreign exchange, cash management and trade finance, with a strong retail franchise underpinning aspirations to be Saudi Arabia's leader in wealth management, supported by innovative online and mobile services.

SABB traces its origins in Saudi Arabia back almost 70 years, during which time it has been an active partner supporting Saudi Arabia's economic growth and social development. SABB is an associate of the HSBC Group and its vision is to be the leading international bank in Saudi Arabia.

Alawwal Bank is Saudi Arabia's oldest bank, with a 92-year legacy of banking innovation in the Kingdom.

The Clifford Chance and AS&H team was led by Mohammed Al-Shukairy (Partner, Clifford Chance) and Mansoor Alhagbani (Partner and Head of Capital Markets and Financial Regulatory, AS&H).

A large team of M&A lawyers and other specialists from our Dubai and Riyadh offices are working on the transaction, including a core team comprising Daniel Boyle, Ashley Cywicki, Amro Bakhaidar and Rizwan Butt.

David Dew, Managing Director of SABB, commented:

"This is a highly significant transaction, not only for SABB and Alawwal, but also more broadly for the development of the economy in the Kingdom, as it executes the ambitious Vision 2030 transformation plan. The proposed merger is a landmark transaction for the Kingdom, and a robust structure and process was therefore critical The expertise and proactive management of issues brought by the legal teams was instrumental achieving this."

Maged Latif, Senior Adviser to the Board of SABB, added:

"The team at Clifford Chance and AS&H has been a trusted adviser on this transaction from the very beginning. The firm brought highly relevant international public company and bank M&A experience, applied in a manner that was very effective in the context of the regulatory framework in Saudi Arabia. The proposed merger is unprecedented in the Kingdom, and the firm's ability to provide real time, technically robust and commercially-focused advice was critical."

Mohammed Al-Shukairy noted "We thoroughly enjoyed working with SABB on this transaction and look forward to moving expeditiously to closing. Clifford Chance consistently advises on transactions that help shape deal structuring and pave the way for public company M&A in the region."

Clifford Chance, for example, previously advised Sorouh on its US$15 billion merger with Aldar Properties, which was the first ever statutory merger in the United Arab Emirates. The firm also recently advised on the US$2.4 billion sale of Americana, the first major takeover of a Kuwaiti publicly listed company.

Mansoor Al Hagbani added: "This proposed merger sets the blueprint for greater consolidation in the Kingdom amongst public listed companies, in a number of sectors, and we are pleased to have a played a role in this."

Clifford Chance has also acted on most bank M&A deals in the region recently, including for clients such as Emirates NBD, Citibank, HSBC, ABN Amro, QNB, National Bank of Kuwait and others.