Baker McKenzie and Legal Advisors are advising Saudi Arabian listed bank Alawwal bank, whose largest shareholder is a consortium made up of RBS, Santander and a Dutch governmental entity, on its merger with fellow Saudi listed bank, The Saudi British Bank ("SABB"), whose largest shareholder is HSBC. The share for share merger has a deal value of approximately US$4.9 billion, making it the first of its kind in Saudi Arabia between two listed banks and one of the largest mergers of two Saudi listed companies. The complex deal is the first merger being undertaken under the recently over-hauled Merger and Acquisition Regulations. The merger agreement has now been signed and the deal is expected to close during the first half of 2019. The merger will create Saudi Arabia's third largest bank with assets of around US$70 billion.
Corporate partner Mohammad Al Rasheed said: "We are very pleased to advise Alawwal bank on this ground-breaking transaction which is a testament to the depth of our corporate practice in the Middle East. Achieving this important milestone would not have been possible without the support and cooperation of the relevant regulators in the Kingdom and the new regulatory regime which facilitates these types of complex transactions. We hope this transaction will encourage other companies to undertake public M&A transactions in the Kingdom. We look forward to continuing to assist Alawwal bank until the successful completion of the transaction."
Commenting on the deal, Helen Bradley, London Corporate Finance Partner at Baker McKenzie, says: "We're delighted to be advising Alawwal on such a transformative deal. This merger will facilitate the flow of international investment capital into Saudi Arabia and supports the country's plan to diversify its economy. For Baker McKenzie this is a great example of our UK and associated office in Saudi Arabia working together seamlessly to deliver high quality advice and help the client achieve its objectives. We see this capability as highly strategic and as the Saudi capital markets become internationalised we are helping to shape market practice around how Saudi issuers can access international capital from investors including in the UK and US both on the Saudi market and by listing Saudi companies in London and elsewhere".
Soren Nikolajsen, managing director of Alawwal bank said "We really appreciated how Baker McKenzie leveraged their local and international experience to guide us through this first of a kind, landmark transaction under new rules in the Kingdom. At every stage, the Baker McKenzie team were on hand with pragmatic, considered guidance and helped drive the process forward".
Corporate Finance Partner Melanie Howard added: "This is a market leading transaction which navigates successfully through the new Merger and Acquisition Rules and their application in the context of a high profile and technically demanding deal. This is the latest in a series of highly complex mandates for financial institutions clients, with others including advising BGEO Group Plc on its demerger into two FTSE 250 companies, advising on the proposed IPO of a large state-owned bank in another MENA country and complex Brexit driven restructuring projects for financial institutions including an international credit card company and a large UK high street bank."
The Baker McKenzie/Legal Advisors team was co-led by Corporate partners Mohammad Al Rasheed and Karim Nassar and London-based Corporate Finance partners Helen Bradley and Melanie Howard. J.P. Morgan Saudi Arabia Company is acting as financial adviser to Alawwal and Goldman Sachs Saudi Arabia is acting as financial adviser to SABB.
This is the latest example of the work of Baker McKenzie and its associated offices in advising on a high value and complex public M&A deal, following on from the recent Danish telecoms deal where we advised a consortium including Macquarie and three Danish pension funds on a recommended €5.4 billion cash offer for TDC A/S.