Ahlibank accepts merger plan proposed by Sohar International

13/04/2025 07:47 AST

Ahlibank's board of directors has accepted the merger proposal outlined in a letter of intent submitted by Sohar International Bank.

On Monday, Sohar International announced its intention to explore a potential merger with Ahlibank and formally presented its proposal through a letter of intent to Ahlibank's board.

Ahlibank's board convened on Thursday to review and evaluate the terms and strategic merits of the proposed merger.

'The board of Ahlibank has resolved to execute and enter into the letter of intent, which includes (among other things) the initial conditions for the proposed merger,' Ahlibank said in a disclosure to the Muscat Stock Exchange.

One of the key initial conditions outlines that the merger will take the form of an incorporation, whereby all assets and liabilities of Ahlibank will be transferred to Sohar International by operation of law on the effective date of the merger.

According to the disclosure, Ahlibank shareholders would receive shares in Sohar International, based on a proposed share swap ratio derived from the respective book values of both banks, as per their audited financial statements for the year ended December 31, 2024.

In a separate filing to the Muscat Stock Exchange, Sohar International confirmed receipt of Ahlibank's acceptance of the merger proposal.

'Sohar International welcomes the endorsement by Ahlibank's board of the compelling strategic rationale underpinning the merger proposal,' the bank said.

Sohar International's board believes the merger offers a strong opportunity for the shareholders, employees, customers and broader stakeholders of both banks, by creating a larger, more diversified, and fully scaled financial institution.

The two banks have agreed on an exclusivity period during which they will work towards progressing the necessary due diligence and negotiations. During this period, neither bank will consider or enter into any alternative merger, acquisition, disposal or similar proposal without the other party's consent.

As of December 31, 2024, Sohar International's total assets had risen 10% year-on-year to RO7.361bn, while Ahlibank's total assets increased by 13.2% to RO3.755bn. If completed, the merger would create a combined entity with total assets exceeding RO11bn.

In its initial disclosure, Sohar International said its board is confident that the proposed merger presents a unique opportunity to establish a stronger, more competitive bank by integrating the successful standalone operations of both institutions.

'This would enable the merged entity to compete more effectively and pursue business opportunities for clients both in Oman and internationally,' the bank added.

Completion of the merger remains subject to the satisfactory conclusion of due diligence, negotiation and signing of a binding merger agreement, and obtaining the necessary regulatory, board, and shareholder approvals from both banks.

Both Sohar International and Ahlibank have confirmed they will continue to keep the market informed of any material developments, in accordance with regulatory requirements.

Muscat Daily