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Mergers and Acquisitions Assignment

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Added on  2019-09-20

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Mergers and Acquisitions: A case studyform NBAD and First Gulf Bank
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IntroductionIn this present paper, we will discuss the merger and acquisition case study of NBAD and first gulf bank. The paper also describes the definition of merger and acquisition, the historical background of the case, working mechanism, service providers, a recent development, and statistical data related to the merger and acquisition.Definition of merger and acquisitionThe merger and acquisition are mainly defined as the consolidation of two companies. The merger is mainly a combination of two companies in order to make a new company whereas in acquisition 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 the year 1968. It is the public joint stock company, and the total assets of the company are $220.4 Billion. The company provides various products to the target audience such as the loan, corporate banking, savings, corporate divisionary, property management, Islamic banking, and others.First Gulf bankIt is the third largest bank in UAE which was established in the year 1979. It is a public bank which provides various services such as consumer banking, wholesale banking, treasury, and investment ("First Gulf Bank," 2017).
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Historical background of caseThe merger has been taking place between the national bank of Abu Dhabi and First Gulf bank on 1 April 2017. Both the banks are trading under Abu Dhabi Security Exchange, and the combined name of the banks is renamed as "first Abu Dhabi Bank." After the merger, it has become 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 has issued a certificate of the merger between NBAD and first gulf bank in order to develop one of the largest banking entities in the UAE which also encourages other banks in the banking sector of UAE. The total assets of both the banks at the end of 2016 were DH665.8Billion ("FGB and NBAD have Successfully Merged," 2017). Work mechanism The central banks play a significant role in the financial sector of UAE and payment system of banks are operated by central banks which includes processing high-value payments, Cheque clearing system, national ATM sharing scheme, and wage protection system of UAE. The working mechanism of banks includes collecting money from customers as a saving and leads it to the people as a loan in order to generate profits. The Cheque clearing system of banks is done under 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 for delivery of payment timely and its settlement within the specific period of time. The wage protection of employees in the UAE is protected under the UAEWPS in which right amount is dispatched by the employer to the employees within the specific time framework. The national ATM sharing scheme is regulated by UAESWITCH within the specific period of time.
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