EBI, NBD boards approve merger

Dubai: In a move that will pave the way for the region's biggest bank merger, the board of directors of Emirates Bank International and National Bank of Dubai separately approved the terms of the proposed merger.

Following the boards' approval, both banks have requested the Dubai Financial Market (DFM) to suspend the trading in their shares with effect from Monday.

The banks did not give any details of the terms of the proposed merger, however, they said in separate statements that the details will be released within 15 days to the relevant regulators.

Trading in both stocks will remain suspended until the details have been communicated to the market regulators.

On March 6, the two banks had announced their plan to merge their operations in an attempt to create the largest bank in the Gulf region with an asset base of $45 billion.

A joint steering committee, headed by Shaikh Ahmad Bin Saeed Al Maktoum, President of Dubai Civil Aviation and Chairman of Emirates Group, was set up in mid-March to oversee the mega merger. Goldman Sachs, one of the world's leading investment banks is advising both the banks on the terms and modalities of the merger.

Post merger the combined entity will have a market value of 41.3 billion ($11.2 billion) at Sunday's closing price on DFM, overtaking Saudi Arabia's National Commercial Bank to become the region's biggest bank.

Speaking on the sidelines of the inauguration of Emirates Bank's sales headquarters yesterday, Ahmad Humaid Al Tayer, Chairman of Emirates Bank Group said the banking sector in the country should prepare itself for international competition. "As a result of WTO related pledge, the country has already opened up its market to more foreign banks. While the local banks are preparing themselves to adapt to the new market realities, creating critical size through mergers will help the face competition better," he said.