The Saudi Arabia unit of HSBC Holding has offered to acquire the Royal Bank of Scotland’s unit in Saudi Arabia for $5 billion in a stock deal. According to the agreement between by RBS-backed Alawwal Bank and Saudi British Bank (SABB), Alawwal shareholders will receive 0.485 SABB shares. The deal values Alawwal’s existing share capital at about 18.6 billion riyals ($6.7 billion). A merger would be Saudi Arabia’s first bank combination for almost 20 years and would make SABB the kingdom’s third-biggest lender with assets of about $73 billion. RBS has for years been trying unsuccessfully to sell its stake in Alawwal, which it took on as part of its acquisition of ABN Amro Bank. The bank is cutting investment banking operations around the world to focus on consumer and commercial lending in the wake of a UK-government bailout.
