Saudi's largest lender NCB agrees to buy rival Samba for $15 billion

National Commercial Bank, Saudi Arabia’s largest lender by assets, agreed to buy rival Samba Financial Group for $15 billion in one of the biggest banking takeovers this year.

NCB agreed to pay 28.45 riyals ($7.58) for each Samba share on Sunday, valuing it at about 55.7 billion riyals. NCB will offer 0.739 new shares for each Samba share, at the lower end of the 0.736-0.787 per share ratio agreed when the banks signed an initial framework agreement in June.

The offer price is a 3.5 per cent premium to Samba’s Oct. 8 closing price of 27.50 riyals and about 24 per cent higher than the price the shares traded at before the talks were made public in June. The combined bank will have total assets of more than $220 billion and a market capitalization of $46 billion.

Bloomberg News first reported the merger talks in June.

More details:

NCB’s existing shareholders will own 67.4 per cent and Samba’s shareholders will own 32.6 per cent of the combined entity.

Expects to unlock about 800 million riyals annually fully phased in cost synergies after integration.

Ammar AlKhudairy, current chairman of Samba, to become chairman of merged bank; Saeed Al Ghamdi, the current chairman of NCB, to become managing director and group CEO.

NCB advised by JPMorgan Saudi Arabia; Samba advised by Morgan Stanley Saudi Arabia.