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Abstract
The $29 billion merger of equals creates MENA's second biggest bank and sets the stage for further consolidation in the sector The merger of First Gulf Bank (FGB) and National Bank of Abu Dhabi (NBAD) has closed, creating the second largest bank in the region. The $29 billion deal gives the new entity, First Abu Dhabi Bank, a combined asset value of $175 billion and a market capitalisation of $29 billion - second only to Qatar National Bank. KEY TAKEAWAYS Speculation is rife in the UAE that the high-profile merger between two major UAE banks will prompt further consolidation in the region; The $29 billion deal forms the MENA region's second-biggest bank and is an outlier in the region where mergers between listed institutions, let alone banks, are rare; It's the first merger between two listed firms since the UAE's new companies law came into effect in 2015; It's a true merger conducted by share swap, meaning the new institution can benefit from synergies; The UAE is vastly overbanked and consolidation is needed to remain competitiveness and operational stability considering how fluctuations in oil prices have put pressure on governments in the region. A true merger "The disadvantage of putting...