HSBC Bank Oman, Sohar International Bank in merger

DUBAI: HSBC Bank Oman and local rival Sohar International Bank have entered into a binding merger agreement, the two lenders say.

All assets and liabilities of HSBC Oman will be transferred to Sohar International, the banks said in two separate regulatory announcements, without disclosing the deal value.

On completion of a merger, HSBC Oman will cease to exist as a legal entity and its shares will be cancelled, the banks said.

Shareholders of HSBC Oman will be offered consideration valuing HSBC Oman at one times book value, with an option for shareholders to elect to receive cash provided it does not exceed 70% of the total consideration payable by Sohar International.

The shares that form a part of consideration to HSBC Oman shareholders will value Sohar International at one times book value, they said.

With this decision, HSBC Oman and Sohar International will join other lenders of neighbouring Gulf countries in consolidating their operations.

Saudi Arabia’s biggest lender National Commercial Bank had merged with smaller rival Samba Financial Group in 2021 to create Saudi National Bank.

The bank has more than Us$240bil (RM1.09 trillion) in assets.

Abu Dhabi has also seen two major bank mergers.