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ADCB and UNB shareholders approve merger

Shareholders of Abu Dhabi Commercial Bank (ADCB) and Union National Bank (UNB) have given their approval for a merger of the two banks and then to acquire Al Hilal Bank. At the separate ADCB and UNB annual general meetings on Thursday, shareholders approved the terms of the transaction, under which ADCB will issue convertible bonds to Al Hilal’s shareholders as the acquisition price paid by ADCB for the privately-held bank. The bonds will be converted into over 117mn new shares in ADCB, increasing the share capital of the bank to up to AED6.9bn on conversion of the bonds. ADCB said at the meeting the acquisition of Al Hilal Bank is expected to close in the second quarter, having earlier said that the merger with UNB alone is likely to be effective only by 1 May 2019. The entity — which will retain the ADCB brand name — will have around 1mn customers, and on the balance sheet side, AED285bn in customer deposits and AED260bn in net loans and advances. Shareholders also approved the appointment of 11 members to the merged entity’s board of directors, each with a term of three years. In terms of capital, shareholders approved the issuance of tier capital instruments with an amount up to USD2bn to strengthen ADCB’s capital adequacy ratio, the details from the meeting show. At UNB’s annual general meeting, shareholders approved the merger and approved terms that will see 0.596 new ADCB shares issued for each UNB share. The merger between the two Abu Dhabi mega-banks will see UNB delisted from the bourse, and its assets and liabilities assumed by ADCB.