| |

BOD Approves Potential Merger of SilkBank with UBL

Merger of SilkBank with UBL

Karachi: Silkbank Limited (PSX: SILK) has taken a significant step towards a potential merger of SilkBank with UBL – United Bank Limited (PSX: UBL), one of Pakistan’s largest commercial banks. In a meeting held on November 6, 2024, Silkbank’s Board of Directors granted in-principle approval for the merger under a scheme of arrangement, which will require sanctioning from the State Bank of Pakistan (SBP) under Section 48 of the Banking Companies Ordinance, 1962.

The proposed merger would see Silkbank merging into UBL, creating a larger entity capable of enhancing service offerings and expanding market reach within Pakistan’s financial sector.

SilkBank Merger with UBL

  • SilkBank’s Board of Directors approves merger of SilkBank with UBL subject to approval of State Bank of Pakistan
  • UBL to issue 1 UBL ordinary share for for every 325 Silkbank ordinary shares

Key Steps and Next Phases of the Merger of SilkBank with UBL

To advance the merger process, Silkbank’s Board has authorized its Chief Executive Officer (CEO) to engage advisors and consultants who will assess UBL’s offer in detail. These advisors will conduct a comprehensive evaluation of the proposal, allowing Silkbank’s Board to make an informed decision based on the findings. This potential merger is contingent upon the finalization of transaction terms, documentation, and the receipt of all necessary corporate and regulatory approvals.

Background and Terms of UBL’s Offer

UBL had previously expressed interest in acquiring Silkbank, announcing in April 2023 that it was exploring a possible amalgamation. UBL sought the SBP’s approval to conduct due diligence on Silkbank, a process critical to determining the viability of the merger.

UBL has proposed a share-swap arrangement for Silkbank shareholders as part of its offer. According to the terms, UBL would issue one of its ordinary shares for every 325 Silkbank ordinary shares. This proposed exchange ratio will form the basis of consideration for Silkbank’s shareholders, offering them a stake in the merged entity should the merger proceed.

Next Steps and Potential Impact of SilkBank Merger with UBL

With an in-principle go-ahead from Silkbank’s Board, the potential merger is now subject to various due diligence processes, final agreement on terms, and regulatory oversight. Both Silkbank and UBL have committed to updating shareholders and stakeholders on significant developments as the process progresses.

If successfully executed, this merger would create a stronger banking entity within Pakistan’s financial landscape, leveraging UBL’s resources and Silkbank’s market position to benefit customers and shareholders alike. The merger also aligns with the broader trend of consolidation within Pakistan’s banking sector, aimed at increasing resilience, improving efficiency, and expanding access to financial services across the country.

Read more about the Economy, News and Announcements here.

Similar Posts

Leave a Reply

Your email address will not be published. Required fields are marked *