AMMB-RHB merger to be an all shares deal

RHB Bank and AMMB said the transaction will effectively be an all shares merger.

KUALA LUMPUR: AMMB Holdings Bhd and RHB Bank Bhd, which have obtained approval from Bank Negara Malaysia (BNM) to start talks for a proposed merger, said it will be an all shares deal. 

In a joint statement, AMMB and RHB said on Thursday both parties had entered into an exclusivity agreement to negotiate and finalise terms and conditions of the proposed merger for submission to the relevant regulatory authorities.

The exclusivity agreement will expire on Aug 30, 2017. 

“It is envisaged that the transaction will effectively be an all shares merger,” they said in a joint statement.  

AmBank Group CEO Datuk Sulaiman Mohd Tahir said: “This new chapter that is opening in the AmBank Group’s history, comes at an opportune time for us as we have been moving closer to achieving our Top 4 goals. 

“I am positive that the proposed merger with RHB Banking Group will create a stronger business and financial presence. Our combined strength in key business segments particularly in retail and investment banking will bode well for us as we move forward to achieve our goal of becoming a formidable banking group,” he said.  

“We are confident that if the proposed merger takes place, it will create greater synergy for the enlarged banking group, benefiting our shareholders, customers, employees and all other stakeholders. 

“A merger of RHB Banking Group and AmBank Group will create a stronger fourth largest banking group, creating scale and market leadership across key business segments,” RHB Banking group managing director Datuk Khairussaleh Ramli said.

RHB and AMMB had requested for a suspension in the trading of their shares, “pending a material announcement”.

If the deal materialises, then the merged entity would end up becoming the country’s fourth-largest bank by asset size.

StarBiz reported that RHB was likely to be the acquiring bank.

AMMB’s major owner is Australia and New Zealand Banking Group Ltd (ANZ) of Australia with a 23.78% stake, while its second-largest shareholder is founder Tan Sri Azman Hashim, who has an effective stake of 12.97%.

RHB, meanwhile, is 41%-owned by the Employees Provident Fund (EPF).

Both banks have a common shareholder in the EPF, with the pension fund also holding a 10.04% stake in AMMB, according to Bloomberg data.

Based on the figures as at the end of last year, the combined assets of RHB-AMMB stood at RM368.3bil, trailing behind Public Bank Bhd’s RM389.73bil. RHB is currently the fourth-largest lender, while AMMB is the sixth largest based on asset size.