According to Forbes the merger between Kuwait Finance House (KFH) and Ahli United Bank would create Kuwait’s biggest Islamic lender and the 6th largest bank in the GCC.
On July 22 the banks signed a Memorandum of Association (MoU) and Non-Disclosure Agreement (NOC).They appointed HSBC and Credit Suisse to conduct the valuation studies to propose a fair price and finalize the exchange of shares ratio.
Kuwait Finance House recorded net profits of $377.85 million, while Ahli United Bank reported net profits of $357.4 million in the first half (H1) of 2018.
The merger would be one of the most significant in the Gulf, joining mergers under review in Saudi Arabia, the United Arab Emirates, and Oman.
According to multinational law firm Baker McKenzie, the total value of mergers and acquisitions (M&A) rose by 62% in the Middle East in H1 2018. The aggregate value of all Middle East M&A activity jumped from $15.7 billion in H1 2017 to $25.4 billion in the same period this year.
Bahrain — which has been looking for ways to handle its own debt — would benefit from the proposed merger. They await financial support from neighboring nations to help reduce debts and increase foreign exchange reserves, and the merger would provide that support.