Ahlibank Oman announced on 12 April 2025 that its board of directors had accepted the terms of a Letter of Intent submitted by Sohar International Bank proposing a merger of the two institutions. The acceptance establishes an exclusivity period during which the banks will conduct comprehensive due diligence and engage in formal negotiations, with Sohar International designated as the surviving entity should the transaction reach completion. The announcement was reported in the Muscat Daily and marks a significant step in what would be one of the most consequential consolidation transactions in Oman's banking sector in recent years.
If completed, the combined institution would hold projected assets of approximately OMR 11.1 billion, equivalent to roughly $28.84 billion, creating a lender of substantially greater scale than either bank on a standalone basis. The prospect of a merger between two of Oman's established commercial lenders reflects both the consolidation logic that has increasingly gained traction across Gulf banking markets and the specific strategic imperatives facing mid-sized institutions seeking to compete more effectively for large corporate mandates, infrastructure financing and cross-border business flows.
EXCLUSIVITY PERIOD OPENS FORMAL NEGOTIATION PHASE
The establishment of an exclusivity period following board acceptance of the Letter of Intent signals that both institutions have progressed decisively beyond preliminary expressions of interest into a structured and time-bound transactional process. During the exclusivity window, the banks' management teams, financial advisers, legal counsel and auditors will work through the detailed financial, operational and regulatory due diligence required before any binding merger agreement can be tabled for shareholder and regulatory consideration.
Sohar International's designation as the surviving entity reflects its current positioning within the Omani banking system and the logic of consolidation that typically sees the larger or more strategically positioned institution provide the continuing legal and operational platform for a combined group. The bank had publicly signalled merger interest in the days preceding Ahlibank's board acceptance, providing the market with early visibility of the potential combination before the formal Letter of Intent acceptance was announced on 12 April.
COMBINED BANK TO RESHAPE OMANI BANKING LANDSCAPE
A merged entity with OMR 11.1 billion in assets would represent a material addition to the upper tier of Oman's banking sector, measurably improving the combined institution's capacity to finance large-scale infrastructure, energy and corporate projects aligned with the sultanate's Vision 2040 economic diversification agenda. Scale is increasingly regarded as a competitive prerequisite for banks in the region seeking to serve clients whose financing requirements exceed the capacity of smaller balance sheets. The combined institution would also benefit from an extended branch network, a broader product range and potential cost synergies from the rationalisation of overlapping operations.
The transaction is consistent with a pattern of bank consolidation across the Gulf Cooperation Council, where regulators and governments have encouraged mergers as a means of creating better-capitalised institutions capable of supporting national economic development programmes. Both Ahlibank and Sohar International will need to secure approvals from the Central Bank of Oman and the Capital Market Authority, among other relevant bodies, before any merger can be finalised. The due diligence process will be the critical next phase in determining whether the two banks proceed to a formal and binding merger agreement.