Sohar International, HSBC Oman sign merger deal

Sohar International Bank and HSBC Bank Oman have entered into a binding merger agreement, the two lenders announced on Wednesday.

The respective boards of directors of Sohar International and HSBC Oman have approved the entry into the binding merger agreement, under which the two banks agreed to take necessary steps to implement the merger by incorporation.

Pursuant to this agreement, the two banks will merge and all of the assets and liabilities of HSBC Oman will be transferred to Sohar International, the lenders said in their separate disclosures to the Muscat Stock Exchange.

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

As per the agreement, the shareholders of HSBC Oman will be offered consideration valuing HSBC Oman at 1.0 times book value, with such consideration consisting of shares of Sohar International with an option for HSBC Oman shareholders to elect to receive cash provided it does not exceed 70 per cent of the total considera

tion payable by Sohar International.

The shares of Sohar International that form part of the consideration to the shareholders of HSBC Oman shall value Sohar

International at 1.0 times book value.

'The respective book value of each bank shall be calculated at a later date (which is currently expected at the end of first quarter of 2023) before the

banks invite their shareholders to vote on the merger in an extraordinary general meeting (EGM),' Sohar International and HSBC Oman said.

Both banks clarified that there will be no immediate change for their customers as a result of Wednesday's announcement. Both banks will re

main independent and continue

to operate a business as usual service until the merger has completed.

Sohar International and HSBC Oman both noted that the

merger – which is still subject to approval from relevant regulatory bodies as well as from the respective shareholders of the two entities – is expected to complete in the second half of 2023.

The timing of the EGMS, the banks said, will be confirmed at a later date and subject to the publication of further information relating to the merger as required by applicable regulations.

'If both extraordinary general meetings vote in favour of the merger, then the resolutions will

be published and the process will follow in line with the requirements of applicable laws and regulations.

'Only at legal completion date will HSBC Oman merge into Sohar International to become a single bank,' the two

banks added.

Pursuant to the agreement, the two banks will merge and all of the assets and liabilities of HSBC Oman will be transferred to Sohar International. On completion of the merger, HSBC Oman will cease to exist as a legal entity and its shares will be cancelled