KUALA LUMPUR: Malaysian Industrial Development Finance Bhd (MIDF) is one step closer to merging with Al Rajhi Banking & Investment Corp (Malaysia) Bhd (Al Rajhi Malaysia) after Bank Negara Malay-sia (BNM) granted them the green light to conduct negotiations for a deal.
MIDF said in a statement today that it had received the go-ahead from the central bank for it and its sole shareholder Permodalan Nasional Bhd (PNB) to begin negotiations with Al Rajhi Banking & Investment Corp, Kingdom of Saudi Arabia (Al Rajhi KSA), on a proposed merger with Al Rajhi Malaysia.
The negotiations must be completed within three months from the date of the letter issued by BNM.
“It should be noted that this should not be construed as implying that a final merger agreement will be reached or that BNM has approved the merger. MIDF will have to obtain prior approval from BNM or the Minister of Finance, with the recommendation of BNM, as the case may be, pursuant to the Islamic Financial Services Act 2013 and the Financial Services Act 2013 before entering into any agreement to effect the proposed merger.
“If an agreement is achieved, it will also be subject to various conditions, including all relevant legal requirements and the approval of all regulatory authorities involved, in both Malaysia and Saudi Arabia,” MIDF noted.
“Further announcements on the proposed merger will be made at the appropriate time as negotiations progress. In the meantime, business will continue as usual,” it added.
MIDF group managing director Datuk Charon Mokhzani said in the same statement that the group looks forward to having fruitful discussions with Al Rajhi KSA, and coming to a mutually beneficial outcome.
It was reported last month that MIDF was exploring a merger with Al Rajhi Malaysia as part of its attempt to become a universal Islamic bank.