The Central Bank of Nigeria (CBN) and the Securities and Exchange Commission (SEC) have approved the merger of Access Bank Plc and Diamond Bank Plc, the last major regulatory hurdle for the consummation of the business combination.
Both banks at the weekend confirmed receipt of the final approval from the financial services authorities.
The final go-ahead came on the heels of the recent approval of the merger by shareholders of both banks at a meeting specially convened by the order of the Federal High Court (FHC). The CBN and the SEC had earlier granted “approval–in-principle”, a no-objection approval, to the merger.
With the final approval of the scheme, the banks will now submit the scheme of merger to the FHC for its judicial sanction, which seals the merger.
Under the merger terms, Diamond Bank will transfer all its assets, liabilities and undertakings to Access Bank and the entire issued share capital of Diamond Bank shall be cancelled and Diamond Bank shall be dissolved without being wound up.
In exchange, Diamond Bank’s shareholders shall receive a cash consideration of N1 per share and two ordinary shares of the enlarged Access Bank for every seven ordinary shares of Diamond Bank held as at the effective date.
Access Bank will be the post-merger entity with its Group Managing Director Herbert Wigwe continuing to lead the post-merger management as chief executive. The business combination is expected to leapfrog post-merger Access Bank as Nigeria’s largest bank by total assets and one of Africa’s largest retail banks.
At the separate court-ordered meeting in Lagos, shareholders had overwhelmingly approved the scheme of merger for the business combination and authorised the directors of the banks to take such actions as may be necessary to give effect to the scheme including listing of the scheme shares on the Nigerian Stock Exchange (NSE).
Directors and management of the banks believed the merger will create significant values for all stakeholders, underlining the inherent synergies and value accretion in the business combination.
The combination is expected to form a leading Tier 1 Nigerian bank and the largest bank in Africa by number of customers, spanning three continents, 12 countries, 3,100 Automated Teller Machine (ATM), more than 33,000 Point of Sales (PoS) terminals, 27 million clients and more than 10 million mobile customers.
Diamond and Access bank share many of the same areas of focus, including women, youth, entrepreneurs and the financially excluded and will be able to further develop their positioning and market leadership in these growth sectors. Diamond Bank’s corporate customers will also be able to benefit directly from Access Bank’s corporate expertise in trade finance, cash management, treasury and corporate finance.
Wigwe said the two banks share several common values and technologies that make the business combination a seamless one.
According to him, the merger of the banks will create significant opportunities and benefits to customers, shareholders, staff and other stakeholders.
He noted that the combination of Diamond Bank’s strong retail customer franchise and Access Bank’s proven risk and capital management expertise will create a post-merger bank with strong value creation potential.
Wigwe pointed out that while the merger will lead to 19 per cent shareholding dilution, the business combina