By Modupe Gbadeyanka
The board of Diamond Bank Plc has confirmed reports in the media relating to the acquisition of the company by another financial institution, Access Bank Plc.
In a statement issued on Monday to the Nigerian Stock Exchange (NSE), Diamond Bank said its merger with the tier-1 bank will result into a more formidable entity in Africa.
It stated that the move was in the “best interest of all stakeholders including, employees, customers, depositors and shareholders,” noting that both parties have agreed to recommend the offer to Diamond Bank’s shareholders.
It said, “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 2 new Access Bank ordinary shares for every 7 Diamond Bank ordinary shares held as at the Implementation Date.
“The offer represents a premium of 260 percent to the closing market price of N0.87 per share of Diamond Bank on the Nigerian Stock Exchange as of December 13, 2018, the date of the final binding offer.”
Business Post gathered that immediately the merger is finalised in the first half of 2019, Diamond Bank would be absorbed into Access Bank and it will cease to exist under Nigerian law.
Also, the current listing of Diamond Bank’s shares on the NSE and the listing of Diamond Bank’s global depositary receipts on the London Stock Exchange will be cancelled, upon the merger becoming effective.
Chief Executive Officer of Diamond Bank, Mr Uzoma Dozie, who commented on the development, said, “The proposed combination with Access Bank will create one of Africa’s leading financial institutions.
“There is 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 Bank 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 while enabling broader financial inclusion.
“The board of Diamond Bank believes that the proposed combination of the two operations provides an exciting prospect for all stakeholders in both businesses and will create a financial institution with the scale, strength and expertise to capitalise on the significant opportunities in Nigeria and sub-Saharan Africa more broadly.”
On his part, CEO of Access Bank, Mr Herbert Wigwe, stated that, “Access Bank has a strong track record of acquisition and integration and has a clear growth strategy.
“Access Bank and Diamond Bank have complementary operations and similar values, and a merger with Diamond Bank, with its leadership in digital and mobile-led retail banking, could accelerate our strategy as a significant corporate and retail bank in Nigeria and a Pan-African financial services champion.
“Access Bank has a strong financial profile with attractive returns and a robust capital position with 20.1 percent CAR as at September 30, 2018. “We believe that this platform, together with the two banks’ shared focus on innovation, financial inclusion and sustainability, can bring benefits to Access Bank and Diamond Bank customers, staff and shareholders.”
