Shuaa in merger talks with ADFG

dubai — Investment bank Shuaa Capital on Sunday confirmed that it was holding merger talks with alternative investment firm Abu Dhabi Financial Group (ADFG) to create a larger financial listed group, lifting its shares by 15 per cent.

Senior executive management teams of the two companies are reviewing the commercial potential along with any legal and structural aspects of the transaction together with financial, legal and valuation advisors, it said in a statement to Dubai Financial Market, where it is listed.

Its shares jumped 15 per cent after the news to close the day Dh0.715, contrary to overall negative market trend.

ADFG, which controls more than $20 billion of assets, is also the largest shareholder in Shuaa, buying a 48.36 per cent stake or 515 million shares worth Dh356 million in November 2016.

Financial institutions in the UAE and other Gulf market are witnessing consolidation amidst lower oil prices and decline in property prices. Abu Dhabi Commercial Bank, Union National Bank and Al Hilal Bank recently announced that their shareholders had approved their merger. Earlier on, National Bank of Abu Dhabi and First Gulf Bank had merged to create the region’s largest banks in terms of assets.

“On completion of the review, the working groups will provide their recommendations to the respective board of directors of each institutions and, should a transaction be agreeable, seek regulatory approvals,” reads the statement posted on the Dubai bourse.

It said there is no certainty that discussions between the two parties will result in transactions. If agreed upon by the shareholders of the two companies, the final structure will be subject to legal and regulatory approval.