Silkbank’s board grants in-principle approval for UBL merger

The Board of Directors (BoD) of Silkbank Limited have granted their in-principle approval for a potential merger with one of Pakistan’s largest commercial banks, United Bank Limited (UBL).

Silkbank shared the development in a notice to the Pakistan Stock Exchange (PSX) on Wednesday.

“Further to our earlier disclosure dated November 1, 2024, the Board of Directors of Silkbank Limited, in its meeting held on November 6, 2024, has accorded its in-principle approval for a potential merger of the bank with and into United Bank Limited (UBL), in terms of a scheme of arrangement to be sanctioned by the State of Bank of Pakistan (SBP) under Section 48 of the Banking Companies Ordinance, 1962.

The board has further authorized the Chief Executive Officer (CEO) of Silkbank Limited to engage advisors and consultants to evaluate the offer made by UBL and to present its findings to the board for further consideration.

“The potential merger remains subject to finalization of deal terms, transaction documents and obtaining of all requisite corporate and regulatory approvals, consents and authorizations,” read the notice.

Earlier, UBL submitted an offer to Silkbank Limited for an amalgamation, aiming to merge Silkbank into UBL. Under the offer, UBL proposed to issue one new UBL ordinary share for every 325 Silkbank ordinary shares as consideration for Silkbank’s shareholders.

Last year in April, UBL informed its stakeholders that “it is exploring a potential merger with Silkbank Limited and intends to seek permission of the SBP to commence due diligence.”

“The potential merger will remain subject to due diligence, internal and regulatory approvals and definitive documents,” it said back then.

Following this, the BoD at Silkbank Limited gave its go-ahead to the management to formally pursue the ‘potential merger’ with UBL.