ADCB, UNB and Al Hilal Bank agreed a merger to create the third-largest bank in the United Arab Emirates with $114 billion of assets.
ADCB will issue 0.5966 shares for every UNB share, corresponding to a total of 1.64 billion new shares issued to UNB shareholders and valuing UNB at nearly $4 billion.
"The scope for revenue synergies is restricted in our view, while post-merger the combined entity will enjoy a bigger scale in terms of its corporate balance sheet, but there will likely be customer overlap," Aarthi Chandrasekaran, vice president at Shuaa Capital, said.
"Additionally, funding cost optimisation is also limited given the modest availability of spare liquidity," she added.
Saudi Arabia's index inched up 0.1 percent with market heavyweight Saudi Basic Industries Corp gaining 0.5 percent and Banque Saudi Fransi increasing 1.1 percent.
Saudi Steel Pipes climbed 5.1 percent after announcing a 82 million riyal ($21.86 million) contract from Saudi Aramco to supply oil and gas steel pipes.
The Dubai index dipped 0.2 percent, with developer DAMAC Properties losing 1.6 percent.
The Qatar index fell 0.2 percent, hurt by a 0.4 percent drop in market heavyweight Industries Qatar, while Commercial Bank was down 0.7 percent. ($1 = 3.7503 riyals) (Reporting by Ateeq Shariff and Abinaya Vijayaraghavan in Bengaluru; Additional reporting by Saeed Azhar; Editing by Alison Williams)
© Reuters News 2019