Court seals Access Bank, Diamond Bank merger

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.