By Kunle Adedoyin
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 two financial services regulators had earlier granted “approval–in-principle”, a no-objection approval, to the merger.
The two regulatory approvals have now paved the way for the new entity to emerge. This development was coming just as the management of the two banks got approval of the merger from their shareholders at a meeting specially convened by the order of the Federal High Court (FHC).
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).
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 new business entity emerging from the merger is expected to be Nigeria’s largest bank and one of Africa’s largest retail banks in term of total assets, number of customers and operational spread spanning three continents, 12 countries, 3,100 Automated Teller Machine (ATM) and more than 33,000 Point of Sales (PoS) terminals.
Directors and management of the banks believed the merger will create significant values for all stakeholders, underlining the inherent synergies and value enlargement for the business.
Wigwe said the two banks share several common values and technologies that make the business combination a seamless one. He said 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.