Qatar’s Masraf Al Rayan and Al Khalij Commercial Bank have agreed to join forces in a deal that will create Qatar’s second-biggest lender after Qatar National Bank.
The deal will see Al Rayan issue 0.50 of its shares for every Al Khaliji share, representing a 21 percent premium over Al Khaliji’s closing price as of January 5, the lenders said in a press release on Thursday.
Data compiled by Bloomberg news values the deal at 8.2 billion Qatari riyals ($2.2bn).
The share swap will leave Al Rayan as the remaining legal entity and create one of the largest banks compliant with Islamic law in the state of Qatar and the Middle East, with combined assets of roughly $47bn, according to the lenders.
Ali Bin Ahmed Al Kuwari will become chairman of the merged entity and Sheikh Hamad Bin Faisal Bin Thani Al-Thani will become its vice chairman.
Sheikh Hamad Bin Faisal Bin Thani Al-Thani will chair the executive committee of the board.
The news comes the same week that Saudi Arabia and its three Arab allies agreed to restore diplomatic and trade ties with Doha at a Gulf Cooperation Council (GCC) summit in the kingdom on Tuesday.
Saudi Arabia announced the restoration of ties with Qatar after the three-and-a-half-year dispute saw the kingdom, the United Arab Emirates (UAE), Bahrain and Egypt cut diplomatic and trade ties and impose a land, sea and air blockade on the Gulf state.
The restoration of trade with its neighbours is expected to boost Qatar’s economy, which also strengthened its trade ties to Turkey, Iran and Pakistan significantly since the 2017 blockade was imposed.