Dubai Islamic Bank, the world's oldest Shariah-compliant lender, has announced that it will fully acquire Tamweel, one of the largest real estate developers in the Middle East. Dubai Islamic Bank already holds a majority stake (58.2%) in Tamweel, which is also headquartered in Dubai.
According to a Reuters report, Tamweel shareholders will be offered 10 shares of Dubai Islamic Bank for every 18 Tamweel shares. After closing the offer, Dubai Islamic Bank will apply for the delisting Tamweel from the Dubai Financial Market.
The acquisition of Tamweel follows news that Dubai Islamic Bank may need to boost its capital. According to a Bloomberg News report, Moody's Investors Service placed that bank on a ratings watch, warning that its loan quality ‘remains very weak compared to peers’ and that it did not have enough funds set aside to cover potential losses stemming from the severe decline in Dubai's real estate market.