Court seals Access Bank, Diamond Bank merger | Nairalaw

The Federal High Court (FHC) has sanctioned the approved scheme
of merger between Access Bank Plc and Diamond Bank Plc, the final
seal that effectively brings the merger of the two commercial banks
into effect.

Consequently, the Nigerian Stock Exchange (NSE) yesterday
suspended trading on the shares of Diamond Bank Plc, which will be
dissolved without being wound up and subsequently delisted from the
Exchange.

The court sanction, statutorily the final phase of a pre-merger
process, which was filed at the NSE, affirmed all the key headlines
of the transactions, which had earlier been approved by
shareholders of the two banks, the Central Bank of Nigeria (CBN)
and Securities and Exchange Commission (SEC).

The Nation had on Monday reported that financial regulatory
authorities had given final approvals to the scheme of merger,
paving the way for submission to a Federal High Court for the final
court sanction.

Under the terms of the merger, 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 while its Group
Managing Director, Herbert Wigwe will continue 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.

The NSE explained that the full suspension on Diamond Bank,
which took effect yesterday March 20, 2019, was sequel to the court
sanction, which brought the business combination into effect on
Tuesday March 19, 2019.

“The suspension is required to prevent trading in the shares of
the bank in order to determine the bank’s shareholders who will
qualify to receive the Scheme consideration,” NSE stated.

The NSE noted that the scheme of merger will result in the
delisting of Diamond Bank Plc from the Daily Official List of the
Exchange.

Directors and management of the banks said the merger will
create significant values for all stakeholders, underlining the
inherent synergies and value accretion in the business
combination.

The business 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 Bank 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.

Group Managing Director, Access Bank Plc, Mr Herbert 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.

He pointed out that while the merger will lead to 19 per cent
shareholding dilution, the business combination accelerates Access
Bank’s plan to become a leading bank in Nigeria and gateway to
Africa.