KFH to buy Bahrain's Ahli for $11.6 bn

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Kuwait Finance House agreed to buy Bahrain's Ahli United for $11.6 billion, a deal almost four years in the making and one that would rank among the banking sector's biggest of the year.

The potential combination, a rare cross border deal in the Middle East, would create the seventh-largest lender in the Gulf with $115 billion in assets. Kuwait's central bank asked KFH to reassess the deal as the pandemic spread in 2020 and approved the combination on Wednesday. The initial offer in 2019 was valued at $8.8 billion, with KFH offering 1 share for every 2.32558 shares in Ahli.

The Kuwait Finance House shares have risen 66% since then, valuing the lender at $25.8 billion. Ahli's market value is $10.3 billion, up 27% in the same period.

After the twin shocks of lower energy revenues and the pandemic, lenders in the oil-rich region are starting to combine locally, and a spate of large transactions has helped consolidate a fragmented industry.

Masraf Al Rayan QSC and Al Khalij Commercial Bank PQSC agreed to combine last year, creating one of Qatar s largest lenders while Saudi Arabia s National Commercial Bank bought Samba Financial Group in one of the biggest banking takeovers of 2020.

The advisers on the KFH deal were HSBC Holdings Plc and Credit Suisse Group AG.

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