Abu Dhabi Commercial Bank’s $114bn Merger with Union National Bank

By Maria Lovin, Carlos Asorey, Adam Butlin and Steven Skorma (UCL and Georgetown University) - Date: 16/02/2019


Overview of the deal

  • Acquirer: Abu Dhabi Commercial Bank PJSC (ADCB:ADX)

  • Target: Union National Bank PJSC (UNB:ADX)

  • Estimated value: $114.0bn

  • Announcement date: 28th January 2019

  • Acquirer Advisors: Barclays, Allen & Overy LLP, KPMG

  • Target Advisors: JPMorgan, Clifford Chance LLP, EY

The UAE banking sector is set to have a powerful new banking group following the decision of Abu Dhabi Commercial Bank (ADCB) and Union National Bank (UNB) to merge and together to acquire Al Hilal Bank. After confirmation of ‘exploratory talks’ regarding a statutory merger between ADCB and UNB on 3rd September last year, their shares have climbed 32% and 48% respectively. This follows a merger between the National Bank of Abu Dhabi and First Gulf Bank in April 2017 to form First Abu Dhabi Bank (FAB) amid a wave of mergers in similar sectors in an attempt by large companies to insulate themselves from the impact of lower oil prices and strong competition from an overcrowded market – 49 banks serve just 9.6 million people.


This new banking group will serve around one million customers, operating under ADCB’s corporate identity though Al Hilal will retain its name and operate as a separate Islamic banking division within the group. ADCB is to issue 0.5966 ADCB shares for each UNB share, a total of 1,641,546,697 new shares issued to UNB shareholders. The deal was recommended unanimously by both boards but is waiting on regulatory and shareholder approval. The deal is ambitiously set for completion in the first half of the year.

"The merger of Abu Dhabi Commercial Banks, Union National Bank and Al Hilal Bank is in line with the UAE's economic vision, to form powerful banking groups with human potentials and financial capabilities that would enhance the national economic competitiveness and its future aspirations.” - Highness Shaikh Mohammed Bin Zayed Al Nahyan, Crown Prince of Abu Dhabi and Deputy Supreme Commander of the UAE Armed Forces

Company Details (ADCB)

The Bank is a United Arab Emirates-based public joint stock company that provides retail, commercial, investment, merchant, brokerage and fund management activities through its network of 48 branches in the United Arab Emirates and abroad: 2 branches in India and 1 in the UK.


- Founded in 1985, headquartered in Abu Dhabi, UAE - Chair: Eissa Mohamed Al Suwaidi CEO: Ala’a Eraiqat

- Number of employees: 5,100

- Market Cap: $13.44bn

- LTM Revenue: $3.81bn - LTM P/B: 1.71x

- Shares Outstanding: 5.2bn

- LTM P/E: 10.54x - LTM P/S: 3.46x


Company Details (Union National Bank)

Union National Bank engages in commercial and investment banking activities. The bank offers a variety of products and services, addressing needs ranging from basic requirements of individuals to the more complex requirements of corporate entities. Its extensive network of banking centres encompasses over 56 locations across all the Emirates.


- Founded in 1982, headquartered in Abu Dhabi, UAE - Chair: Nahayan Mabarak Al Nahayan CEO: Mohammad Nasr Abdeen

- Number of employees: 2,073

- Market Cap: $3.93bn

- LTM Revenue:$1.36bn

- LTM P/B: 0.85x

- Shares Outstanding: 2.75bn

- LTM P/E: 9.82x - LTM P/S: 2.56x


Projections and Assumptions