Saudi British Bank and Alawwal Bank received shareholder approval for their proposed merger, paving the way for the two Saudi Arabia-based banks to complete the deal by June.

The shareholders approved the offer submitted by Saudi British Bank to acquire its local peer through the issuance of 0.48535396 new Saudi British Bank share for every 1 share in Alawwal Bank, which will lead to the dissolution of Alawwal Bank.

In relation to the merger, Saudi British Bank shareholders also approved increasing the bank's capital to 20.55 billion riyals from 15.00 billion riyals, with the number of its shares increasing to 2,054,794,522 from 1.50 billion, Mubasher reported.

Alawwal Bank also announced the commencement of a creditor objection period, which will run from May 16 until June 15. The two banks' merger will take effect upon the expiry of the period, assuming there are no unresolved creditor objections.

Saudi British Bank had earlier secured approval from the Saudi General Authority for Competition over its planned acquisition, which is expected to create a combined entity with a market capitalization of about 64.6 billion Saudi Arabian riyals and 268 billion riyals in assets.

The shareholders of Saudi British Bank also approved the sale of 1 million shares held by the company in HSBC Saudi Arabia Ltd. to HSBC Asia Holdings BV for an aggregate purchase price of 36 million riyals, subject to a number of conditions, including obtaining the necessary regulatory approvals, according to Mubasher.

As of May 16, US$1 was equivalent to 3.75 Saudi Arabian riyals.