Ecobank Nigeria Plc and Oceanic Bank International Limited, both subsidiaries of Ecobank Transnational Incorporated, have said that the two banks are set to merge their businesses.Ecobank, in a statement on Wednesday, said, "Following discussions between the Boards of Directors of Ecobank and Oceanic Bank, we are pleased to announce that the banks have agreed to merge their respective businesses. The proposed merger will be effected through a Scheme of Merger pursuant to Part XII of the Investments and Securities Act (No. 29) of 2007 and when concluded, will result in Oceanic Bank being merged with Ecobank Nigeria, leaving Ecobank Nigeria as the surviving entity."The statement added that as a consequence of the proposed merger, it was expected that ETIs shareholding in the enlarged Ecobank Nigeria would increase from its current 85 per cent to approximately 93 per cent, further reducing Ecobank Nigerias minimum free float to maintain listing on the Nigerian Stock Exchange. It said, "Therefore, in consideration of the interest of minority shareholders of Ecobank Nigeria, the Board of Directors of Ecobank Nigeria, after considering the valuation advice of BGL Plc, financial advisers to Ecobank Nigeria, as well as an independent fairness opinion issued by Afrinvest (West Africa) Limited, unanimously accepted a proposal from ETI to acquire the shares in Ecobank Nigeria not already owned by ETI, and resolved to recommend to its shareholders that concurrent with the Scheme of Merger, Ecobank Nigeria undertakes a Scheme of Arrangement with its shareholders for the reorganisation of its share capital." The statement further said that the Scheme of Arrangement, would be undertaken pursuant to section 539 of the Companies and Allied Matters Act and would involve a cancellation of part of Ecobank Nigerias share capital. It said, "Under the terms of the Scheme of Arrangement minority shareholders will receive one ordinary share in ETI to be credited as fully paid; for every 5.16 Ecobank Nigeria shares previously held by the minority shareholders, such that Ecobank Nigeria will be a wholly-owned subsidiary of ETI. "As a consequence of the proposed Scheme of Merger, Ecobank Nigeria may no longer qualify for listing on the NSE and shareholders will therefore own equity in an unlisted public company. In addition, the proposed Scheme of Arrangement will enable holders of Ecobank Nigeria Scheme Shares to own equity in ETI, which is a more liquid stock, listed on the three major West African stock exchanges and with attendant diversification benefits from ETIs operations in 32 countries."It noted that the proposed Scheme of Arrangement was subject to shareholders and regulatory approvals as well as the sanction of the Federal High Court.
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