Shareholders in First Gulf Bank PJSC (FGB) and National Bank of Abu Dhabi PJSC , NBAD, have approved a proposed merger of the two banks, which will create the largest financial institution in the United Arab Emirates, UAE, with assets of approximately AED655 billion (US$178 billion).

At separate general assembly meetings held on Wednesday, shareholders in FGB and NBAD voted in favour of the merger, which was recommended by the board of directors of both banks on 3rd July, the two banks said in an emailed joint press release.

The recommended transaction will involve a share swap, in which FGB shareholders receive 1.254 NBAD shares for each FGB share they hold.

Following the issue of new NBAD shares, FGB shareholders will own approximately 52 percent of the combined bank, with NBAD shareholders owning approximately 48 percent. The Government of Abu Dhabi and Government related entities will own approximately 37 percent of the merged entity.

On the effective date of the merger, FGB shares will be delisted from the Abu Dhabi Securities Exchange (ADX) and the company dissolved.

The merger has been approved by the Central Bank of the UAE, and requires further approval from international regulators and the Securities and Commodities Authority (SCA) before it becomes effective, which is expected to occur towards the end of the first quarter of 2017. Following the shareholder approval, a 30-day creditor objection period will be triggered on 12th December, 2016.

"The overwhelming vote of support from FGB and NBAD shareholders to approve this historic merger is a clear testament to the compelling rationale and value proposition for creating a bank with the financial strength, scale and expertise to deliver benefits for our customers, our shareholders and for the wider UAE economy," Sheikh Tahnoon bin Zayed Al Nahyan, Chairman of FGB, commented.

Nasser Ahmed Al Suwaidi, Chairman of NBAD, described the endorsement for the combined bank from both sets of shareholders as resounding and a significant milestone. "The new larger bank will be in an excellent position to invest in our people, in technology, in products and services that our increasingly sophisticated client base demands, while capitalising on growth opportunities in the UAE and beyond".

Shareholders from both banks voted in favour of all agenda items at each general assembly meeting, including the authorisation of the combined bank’s board of directors once the merger becomes effective.

Sheikh Tahnoon bin Zayed Al Nahyan is the Chairman designate, while Nasser Ahmed Al Suwaidi is the Vice Chairman designate. Abdulhamid M. Saeed, who is currently Board Member and Managing Director of FGB, is the Chief Executive Officer designate for the combined bank.

Abdulhamid M. Saeed, Chief Executive Officer Designate, added, "Since the announcement of the planned merger in July, both banks have made strong progress towards integration. The vote of confidence from shareholders to create the largest bank in the UAE is based on an understanding that bringing together the best talents from FGB and NBAD and will create a market-leading product offering both in Personal Banking as well as in Corporate and Investment Banking locally and overseas."