The Burgan Bank and the United Gulf Bank have announced that they will continue to implement the transaction in which Burgan will purchase three regional commercial banks from the United Gulf Bank.
The Burgan Bank’s regional expansion strategy involved the purchase of United Gulf’s (UGB) affiliates Jordan Kuwait Bank, Algeria Gulf Bank, Bank of Baghdad and Tunis International Bank. The deal was to be funded by a capital increase by Burgan.
Having obtained the necessary regulatory approvals, the Burgan Bank has completed the purchase of UGB’s 43.86% stake in Jordan Kuwait Bank in 2008. This took Burgan’s total stake in Jordan Kuwait Bank to 51.1% which was consolidated on September 30, 2008 on a basis that complied with Burgan’s capital adequacy obligations.
Both the Burgan Bank and UGB said it is their firm intention to pursue the transaction and that they will adhere to all the necessary procedures so that the deal can be completed.
This process will require a number of new procedures and approvals from regulators and other concerned authorities and as a consequence the Burgan Bank shareholders will be approached in due course to give the required endorsement at a general assembly meeting.
Tariq Abdul-Salam, chairman of the Burgan Bank, said: Despite this delay in completing the transaction with UGB, our regional expansion plans will continue during the course of 2009. The acquisition of the other regional banks is expected to be completed once the required shareholder and other consents are obtained.
