Merger of Alawwal Bank into SABB
Merger is one of the positive legal phenomena, as it indicates the intensification of competition between commercial companies, and aims to strengthen the financial position in the market.
The idea of merger is based on annexation and cohesion, always resulting in the annihilation of at least one of its parties.
The merger may be by way of blending, which results in the annihilation of all parties to the relationship and the emergence of a new legal entity.
It may be through annexation, where the merged company merges into the merging company, and all the rights and obligations of the merged company are transferred to the merging company. Both of them also contribute to the management of the merged company, each according to their share in the capital, and this relationship is governed by the merger document.
Perhaps the most prominent and closest example is the merger of Alawwal Bank into the Saudi British Bank “SABB”, which took effect on June 16, 2019. This merger is considered to be of the second type (merger through annexation), and it resulted in the dissolution of Alawwal Bank, and the transfer of all its rights and obligations to SABB Bank.
The first subsequent steps for the merger to take effect were the appointment of Ms. Lubna Suleiman Al-Olayan as Chairman of the Board of Directors, and the continuation of the term of Vice President Khalid bin Abdullah Al-Mulhim, as well as the continuation of the term of the Executive Director until the end of the current Board session.
In addition, a number of board members resigned to provide vacant seats for Alawwal Bank’s candidates. Thus, Alawwal Bank has a role in managing SABB Bank, having merged with it.
As for the general assembly of Alawwal Bank, it has passed, and the shareholders have been compensated such that each shareholder in Alawwal Bank receives a number of 0.485 in SABB for every share they own, and thus they become members of the general assembly of SABB and contribute to its management within the limits of the shares they own.
It is worth noting that SABB Bank has become the third largest bank in the Kingdom of Saudi Arabia in terms of assets, with a value of approximately 285 billion riyals.
