The merger agreement is conditional on, amongst other things, obtaining regulatory approvals and upon the requisite resolutions being passed by the shareholders of Al Rayan and Al Khaliji. Both entities will continue to operate independently until the effective date of the merger.
It will be effected by a statutory merger whereby Al Khaliji will be dissolved and all of its assets and liabilities shall become part of Al Rayan by operation of law with effect from completion of the Merger.
Following the merger, Al Khaliji's business will be absorbed into Al Rayan's business, and Al Rayan will be the remaining legal entity, which will continue to operate in accordance with Islamic Shari’ah principles.
As per the deal, Al Rayan will issue 0.50 Al Rayan shares for every Al Khaliji share, corresponding to a total of 1,800 million new shares issued to Al Khaliji shareholders.
With this move, Ali Bin Ahmad Al Kuwari will become chairman and Sheikh Hamad Bin Faisal Bin Thani Al Thani will become vice chairman of the board of the merged entity. The Executive Committee of the board will be chaired by Sheikh Hamad Bin Faisal Bin Thani Al Thani.
The merger, which has the support of the board of directors of Al Rayan and Al Khaliji, will, once effected, create a larger and stronger financial institution with a strong financial position and significant liquidity available to support Qatar’s economic growth and to finance development initiatives in line with the Qatar Vision 2030.
Furthermore, it will create one of the largest Shari’ah-compliant banks in Qatar and in the Middle East with combined assets worth around QR172 billion ($47 billion) as of September 30.
The merger is also expected to contribute positively to the economic development in the country by supporting corporate businesses and small and medium sized entities, and will also create a strategic partner for the public sector.
On the merger, Al Kuwari said: "This is a landmark transaction that will contribute to Qatar’s economic growth, vision and ambitions and is a testament to our commitment to creating a more robust Qatari banking system."
"The combined entity will create an even stronger institution that will aim to create value for our customers and shareholders," he stated.
Sheikh Hamad said: "The combination of both banks will create increased scale, capacity and efficiency to allow us to support our diverse customer base and drive the enhancement of our product offering across the board."
"We are confident that this transaction will contribute to the development of the economy as a whole," he stated.
JP Morgan is acting as financial advisor to Al Rayan and Al Khaliji in their role as members of the steering committee in connection with the merger, while K&L Gates and KPMG are acting as legal and transaction advisors to Al Rayan, respectively.
Clifford Chance LLP (in conjunction with Sultan Al-Abdulla & Partners) and EY are acting as the legal and transaction advisors to Al Khaliji, respectively.
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