The merger will see HSBC take a 51% majority share of the combined entity, which will be renamed HSBC Oman SAOG. To enable this, OIB will issue HSBC with new shares to the value of 51% of the combined company.
The fifth largest bank in Oman, OIB has the second biggest branch network in the country and had gross assets of $3.2bn (AED11.8bn, €2.4bn, £2bn) at the end of December 2011. A statement said the merger will not affect OIB’s listing on the Muscat Securities Market. As at the end of December last year, HSBC Oman had gross assets of $2.5bn.
Under the terms of the merger, HSBC will inject additional capital of up to $97.4m in cash from its internal resources into HSBC Oman, following which the entities will be merged.
Simon Cooper, deputy chairman and chief executive of HSBC in the Middle East and North Africa, said: “This transaction presents HSBC with a great opportunity to invest for growth in a key Gulf economy. With over 60 years’ presence in the country, we recognise the tremendous business opportunities in Oman.”
The merger is subject to regulatory and other approvals, including approval by OIB’s shareholders, and is expected to complete in the second quarter of 2012.
