Creation of Nigeria’s Largest Bank As Diamond Bank Merges with Access Bank in a 7 for 2 (+N1.00k) Deal

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After weeks of rumours and rebuttals, Access Bank and Diamond Bank both announced a planned merger of the two Banks on 17-Dec-18, expected to be concluded in H1-2019. Access Bank will exchange a consideration of N3.13/share (consisting of N1.00k cash and 2units of New Access Bank ordinary shares) for every 7 units Diamond Bank ordinary shares held as at the date of implementation of the transaction.

Creation of Nigeria’s Largest Bank As Diamond Bank Merges with Access Bank in a 7 for 2 (+N1.00k) Deal - Brand Spur

This represents a premium of 260% to Diamond closing price of N0.87/share on the Nigerian Stock Exchange (NSE) on 13-Dec-18, the date of the final bidding.

We highlight that on completion, Diamond Bank would be subsumed into Access Bank and will cease to exist as a separate legal entity under the Nigerian Law. Also, the Shares of Diamond Bank Plc on the NSE and its Global Depository Receipts (GDR) on the floor of the London Stock Exchange (LSE) will be delisted.

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On completion of the merger, Access Bank’s total asset is expected to jump from N4.5tn as at 9Month 2018 to N6.0tn (plus Diamond’s N1.5tn), making the Bank the largest Bank in Nigeria by Total Asset, ahead of Zenith (N5.6tn) and FBNH (N5.3tn). while we advise investors to HOLD Diamond, we are neutral on Access bank until our review of the implication is concluded.

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Creation of Nigeria’s Largest Bank As Diamond Bank Merges with Access Bank in a 7 for 2 (+N1.00k) Deal - Brand SpurCreation of Nigeria’s Largest Bank As Diamond Bank Merges with Access Bank in a 7 for 2 (+N1.00k) Deal - Brand Spur

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Creation of Nigeria’s Largest Bank As Diamond Bank Merges with Access Bank in a 7 for 2 (+N1.00k) Deal - Brand SpurCreation of Nigeria’s Largest Bank As Diamond Bank Merges with Access Bank in a 7 for 2 (+N1.00k) Deal - Brand Spur

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