HSBC Bank Oman and local peer Sohar International Bank have reached an agreement to merge their operations.
The transaction will see transfer of all HSBC Oman assets and liabilities to Sohar International and upon completion, HSBC Oman will cease to exist and its shares will be cancelled.
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According to the stock filing, shareholders of HSBC Oman will be given the option to choose between receiving cash up to a maximum of 70% of the total consideration that Sohar International will be required to pay, or a consideration that values HSBC Oman at 1.0x book value.
The shares included in the payment to HSBC Oman shareholders will value Sohar International at 1.0x book value, the statement reads.
London-based HSBC has been present in Oman since 1948.
HSBC Oman was created following the merger of HSBC Bank Middle East’s operations in Oman with Oman International Bank in 2012.
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By GlobalData“HSBC Bank Middle East Limited will now seek regulatory approval to establish a new, wholly owned branch of HSBC Bank Middle East Limited in Oman, should the merger of HSBC Oman and Sohar International receive the necessary shareholder approvals,” the lender was quoted by Reuters as saying.
Last week, Chinese insurance major Ping An and HSBC’s largest shareholder urged the bank to reduce costs by cutting jobs and selling businesses in sub-scale peripheral ex-Asian markets.
Ping An also asked HSBC to allocate resources more effectively between Asian and Western operations.
