CIMB and RHB agree to 3-way merger
CIMB Group Holdings, Malaysia's second-biggest lender, and RHB Capital agreed to a merger that paves the way for the creation of the nation's largest bank by assets.
CIMB and RHB Capital will swop shares at a ratio of one RHB share for every 1.38 CIMB share, according to a joint statement.
As part of the transaction, which is expected to be completed by the middle of next year, the two companies' Islamic banking units will combine with Malaysia Building Society to form a "mega Islamic bank", the lenders said.
CIMB, RHB and Malaysia Building Society shares were suspended yesterday before the statement.
The companies, which have a combined market value of about US$27 billion (S$34 billion), announced plans for the deal in July and entered a 90-day exclusive agreement to negotiate and finalise the price and structure of the merger.
The agreement highlights a trend towards fewer, bigger lenders in Malaysia as overseas companies expand their presence in the country and Asean leaders press on with integrating the region's markets.
A combination of the three would create a group with total assets of RM629 billion (S$246 billion) as of June 30, surpassing Malayan Banking's RM583.4 billion, according to data compiled by Bloomberg.
The companies said they have applied to the central bank for the merger's approval. They will begin due diligence with the aim of signing a "definitive" sale and purchase agreement early next year, according to the statement.
They will seek other regulatory and shareholder approval after that.