KFH, AUB select HSBC, Credit Suisse to advise on merger talks

Kuwait Finance House (KFH) and Bahrain’s Ahli United Bank (AUB) have selected HSBC and Credit Suisse to advise on their possible merger, AUB said on Sunday.

The two international lenders were selected to complete studies to assist AUB and KFH in arriving at a fair share exchange ratio, the statement said.

Following this, the next step would be the initiation of due diligence and other steps, it added.

Last week, KFH said it had invited AUB to begin a due diligence process for a potential merger, in a deal that could lead to creation of a new Islamic lender worth nearly $90 billion in combined assets.

In a separate statement on Monday, KFH chairman Hamad Abdulmohsen Al-Marzouq said the merger plan was in line with KFH’s strategy of growth and expansion in the region and the world.

“The financial and economic circumstances in the region necessitate thinking seriously about such directions, which aim to create large financial entities that are capable of withstanding shocks, while having financial capacity and internal resources to compete regionally and globally, yet maintaining a strong capital base,” Al-Marzouq said in a media statement.

He added that the Central Bank of Kuwait, Central Bank of Bahrain and other regulatory authorities will be contacted for the necessary approvals before the due diligence procedures begin.