Mergers and Acquisitions Assignment

Added on - Sep 2019

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Mergers and Acquisitions: A case studyform NBAD and First Gulf Bank
IntroductionIn this present paper, we will discuss the merger and acquisition case study of NBAD and firstgulf bank. The paper also describes the definition of merger and acquisition, the historicalbackground of the case, working mechanism, service providers, a recent development, andstatistical data related to the merger and acquisition.Definition of merger and acquisitionThe merger and acquisition are mainly defined as the consolidation of two companies. Themerger is mainly a combination of two companies in order to make a new company whereas inacquisition one company is acquired by another company.NBADNational bank of Abu Dhabi is one of the largest banks in Abu Dhabi, and it was founded in theyear 1968. It is the public joint stock company, and the total assets of the company are $220.4Billion. The company provides various products to the target audience such as the loan,corporate banking, savings, corporate divisionary, property management, Islamic banking, andothers.First Gulf bankIt is the third largest bank in UAE which was established in the year 1979. It is a public bankwhich provides various services such as consumer banking, wholesale banking, treasury, andinvestment ("First Gulf Bank," 2017).
Historical background of caseThe merger has been taking place between the national bank of Abu Dhabi and First Gulf bankon 1 April 2017. Both the banks are trading under Abu Dhabi Security Exchange, and thecombined name of the banks is renamed as "first Abu Dhabi Bank." After the merger, it hasbecome the largest bank in UAE, and one of the largest in MENA region as the total assets of thecompany are approximately more than AED 670 Billion. The market regulator of UAE hasissued a certificate of the merger between NBAD and first gulf bank in order to develop one ofthe largest banking entities in the UAE which also encourages other banks in the banking sectorof UAE. The total assets of both the banks at the end of 2016 were DH665.8Billion ("FGB andNBAD have Successfully Merged," 2017).Work mechanismThe central banks play a significant role in the financial sector of UAE and payment system ofbanks are operated by central banks which includes processing high-value payments, Chequeclearing system, national ATM sharing scheme, and wage protection system of UAE. Theworking mechanism of banks includes collecting money from customers as a saving and leads itto the people as a loan in order to generate profits. The Cheque clearing system of banks is doneunder image Cheque clearing system which provides robust payment mechanism with safety andsecurity of payments in UAE (Dantas et al., 2017). The Central bank of UAE is responsible fordelivery of payment timely and its settlement within the specific period of time. The wageprotection of employees in the UAE is protected under the UAEWPS in which right amount isdispatched by the employer to the employees within the specific time framework. The nationalATM sharing scheme is regulated by UAESWITCH within the specific period of time.
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