Muscat: Bank Nizwa has proposed acquiring Alizz Islamic Bank and merging it into its operations, in a deal that could create a larger Islamic lender and bring Ominvest in as a major strategic shareholder.
The proposal was disclosed through the Muscat Stock Exchange (MSX) on Thursday. Under the plan, Bank Nizwa would acquire the entire issued share capital of Alizz Islamic Bank from Oman Arab Bank at an indicative valuation of 1.2 times its book value. Alizz would then be merged into Bank Nizwa.
The proposal remains non-binding. It is still subject to negotiations, due diligence and approvals from regulators, shareholders and other relevant parties.
The deal would be financed through a combination of capital instruments, including perpetual Additional Tier 1 sukuk and the issuance of new shares to Oman International Development and Investment Company, better known as Ominvest.
Ominvest said its board had approved the company’s participation as a strategic investor in the proposed funding structure. If the transaction is completed, Ominvest could hold up to 20 per cent of Bank Nizwa’s issued share capital through its subscription to the new shares. The companies did not disclose the expected value of the transaction, the size of the proposed sukuk issuance or the amount Ominvest would invest.
The proposed merger would bring together two established names in Oman’s Islamic banking market and could give the combined institution a broader customer base, stronger capital support and greater capacity to finance businesses and individuals. However, the final shape and financial impact of the deal will depend on the terms agreed by the parties and the outcome of the approval process.
Alizz Islamic Bank currently operates as a subsidiary of Oman Arab Bank. Its proposed transfer to Bank Nizwa would represent a significant change in the structure of Oman’s Islamic banking sector.
Bank Nizwa said the initiative was expected to support the sector’s development and strengthen its contribution to Oman’s economy. Both Bank Nizwa and Ominvest said they would keep investors informed of any material developments through the MSX.
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