Shareholders of Emirates Bank International (EBI) and National Bank of Dubai (NBD) will exercise their vote on a government plan to combine the two banks today and tomorrow, a move that will pave the way for the creation of the Gulf’s largest bank by assets.
The banks’ stakeholders will vote on the establishment of Emirates NBD, which both banks agreed to create in July in a $11.3 billion deal at the request of Sheikh Mohammed bin Rashid al-Maktoum, the UAE Vice President, Prime Minister and Ruler of Dubai.
“Dubai’s status as an international financial services centre will be further reinforced with the proposed merger between EBI and NBD,” said Sheikh Ahmad bin Saeed Al Maktoum, chairman of the joint steering committee of EBI and NBD, in a statement.
“This week is therefore important for Dubai, with the banks’ EGMs serving not only as a crucial step in the formation of the region’s biggest bank by assets, but to underline the principles of shareholder rights and transparency that Dubai is founded on.”
EBI shareholders will vote this afternoon at an extraordinary general meeting (EGM) at the Sheraton Dubai Creek Hotel & Towers in Deira.
NBD shareholders will be given the opportunity to vote on the merger on Thursday at their EGM at Dubai’s Radisson SAS Hotel, also in Deira.
If both sets of shareholders agree to the merge, Emirates NBD will be formally established on October 14, with Emirates Bank shareholders gaining a 66.3% stake and National Bank a 33.7% stake in the new lender.
“We are determined to ensure that the shareholders of both banks are given the chance to have a say in the merger between NBD and EBI, and to exercise their rights as owners to vote at the EGM,” said the chairmen of both banks in a joint statement.
“The merger is positive for the shareholders, customers and employees of both banks, and we look forward to welcoming shareholders to their respective EGMs this week.”
Emirates Bank shareholders will swap their stock for the new bank’s shares on a one-for-one basis at 9.3 dirhams ($2.53), while NBD shares will be exchanged at 8.84 dirhams.
The government of Dubai, which owns 76.62% of Emirates Bank and 14.25% of NBD, intends to accept the offer, the banks said in July when the schedule for the merger was announced. The Dubai government will therefore own 56% of Emirates NBD through its stake in both banks.
Shares of both banks will stop trading on the Dubai bourse on October 7 and Emirates NBD shares will then be listed on October 14.
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