KARACHI - MCB Bank has officially announced the signing of agreement with The Royal Bank of Scotland (RBS) Group on Wednesday, whereby MCB Bank will acquire 99.37 per cent of the ordinary share capital in RBS (formerly, ABN Amro Pakistan), from its major shareholder and sponsor ABN Amro Bank N.V. which is a subsidiary of The Royal Bank of Scotland Group. The transaction is subject to necessary regulatory and other approvals and is expected to complete in Q4 2009. MCB will initially acquire from ABN Amro Bank N.V 1,707,107,891 of ordinary shares in RBS Pakistan, representing 99.37pc stake, for a cash price of Rs 4.22 per share. The total consideration to be paid will be Rs 7.20 billion (approximately $87 million). In addition, MCB will make a tender offer for the remaining 0.63pc of ordinary shares not owned by the majority shareholder under the Listed Companies (Substantial Acquisitions of Voting Shares and Takeovers) Regulations, 2008. The tender offer will also be subjected to the necessary regulatory and other approvals. Based on RBS Pakistans December 31, 2008 audited book value, the purchase price represents an implied price to book value multiple of 0.87x. MCB will fund the transaction entirely through internally generated cash resources and the transaction is not contingent on any external fund rising. This agreement with MCB follows the completion of the strategic review and the announcement on 26 February 2009 that RBS was to dispose of its retail and commercial businesses across Asia along with the decision to exit its wholesale banking businesses in Vietnam, the Philippines, Taiwan (except the Securities business) and Pakistan in an effort to refocus the Groups geographic reach across a smaller number of key markets. The acquisition is inline with MCBs strategy of expanding its service platform, strengthening its product offering and building on its expertise in transactional services. As a result of the transaction, based on latest available numbers, the total number of branches of combined MCB and acquired bank (RBS Pakistan) will increase to 1,139; the total consolidated deposits will increase to Rs 413 billion and consolidated gross advances to Rs 324 billion. Commenting on the transaction MCBs Chairman, Mian Muhammad Mansha, said, This is an important transaction for us as it strengthens our franchise in the key urban centres and broadens our product offering to our retail as well as corporate customers. We have also managed to add a large number of experienced professionals to our existing strong team. As a result of this transaction, I am confident that MCBs position has been strengthened to deliver on our growth plans. MCB President, Atif Bajwa said The RBS acquisition will be crucial in providing access to important customers, in making available a strong human resource pool as well as an evolved product development and technology infrastructure. We are convinced that this transaction will be beneficial to all stakeholders. Commenting on the sale, Muhammad Aurangzeb, Chairman of RBS Pakistan said, MCB will be an excellent owner of the strong customer franchise we have established here in Pakistan. I am particularly pleased that our staff and customers will become part of one of the leading banks in Pakistan with a long standing banking history of over sixty years and which has such clear ambitions to grow further in its home market as well as internationally. Bank of America Merrill Lynch and KASB Securities have advised MCB while Morgan Stanley has advised The Royal Bank of Scotland Group plc on the transaction. RBS Pakistan is a leading international bank in Pakistan with a network of over 75 branches in 24 cities, of which 30 serve the affluent retail customer segment and 3 are Islamic banking branches and has over 90 ATMs. At December 31, 2008 RBS Pakistan had total assets of Rs 108 billion. RBS Pakistan has 1,717,981,391 ordinary shares listed on the Karachi stock exchange.