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National Bank of Greece is taking over Eurobank

06 October 2012 / 18:10:16  GRReporter
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The National Bank of Greece (NBG) announced that it has made a public offer to acquire all of the registered shares issued by Eurobank, with a nominal value of 2.22 euro each. As compensation, NBG is offering new common registered shares with a new nominal value of 1 euro, issued by NBG, at a ratio of 58 National Bank's new shares to 100 Eurobank's shares. The stocks are traded on the Athens Stock Exchange. If the takeover is successful, the shareholders' ratio of both banks will be 75% for NBG and 25% for Eurobank. NBG's capitalisation after the market closed on Thursday, 4 October, amounted to 1.9 billion euro, while Eurobank's was 603 million euro.

The National Bank, as outlined in the statement, thinks that the acquisition will provide a strategic advantage, because after the merger the bank is expected to:

- create an extended bank holding company with greater stability and viability, which will contribute to the funding of the Greek economy's recovery and which will help to ensure a climate of confidence in the Greek financial system

- better respond to the needs of the customers in South-eastern Europe through a combination of products, branch networks and balances

- combine the best of both banks, offering significantly improved opportunities for achievement of independence from the Fund for financial stability in the coming years.

George Zanias, President of NBG, said that the acquisition aims to create a banking group which will play a major role in the Greek financial system's stabilization and which will support the recovery of the Greek economy. Alexandros Tourkolias, CEO of NBG, said that by this offer the National Bank is achieving a consolidation of the Greek banking system, creating a stable long-term financial credit institution, which is able to withstand the challenges, and in the meantime provide opportunities for the shareholders of both banks. Tourkolias expressed his conviction that the Governing Board of Eurobank will appraise the value created by the public offer and will propose the transaction to its shareholders.

The deadline for accepting the offer starts from the date of publication of the news bulletin and the results will be published within two working days after the end of the deadline.

The merged company will be called National Bank Group. The group will have a network of 925 branches across Greece, as well as a broad presence in Southeast Europe - in regions such as Turkey, Romania, Bulgaria and Serbia.

The main sources of joint participation are:

- connection of the local and regional networks of both banks; joining of structures and systems

- decrease of the general costs and administrative expenses, both inside the country and abroad

- optimization of the investments and of the group's financial strategy

- increase of the percentage of transactions with existing customers by expanding the product range and the economic strength of the group.

George Zanias and Alexandros Tourkolias will remain respectively president and CEO of the new group. The rest of the members of the managerial board will be divided equally between the two banks. The "best from both banks" approach will be used to form the executive committee and to specify the administrative positions at the lower levels.

Eurobank’s Executive Director Nikolaos Nanopoulos said that the public offer is part of the development of the Greek bank system's consolidation. The board of managers at Eurobank will evaluate the offer, mainly considering the interest of everybody, including the bank's employees, customers, shareholders, as well as the interest of the Greek economy. Eurobank's board of managers, supported by its financial advisers such as Barclays, Deutsche Bank and Goldman Sachs International, will review the offer and announce its decision.

If the National Bank of Greece and Eurobank merge, the largest Greek bank will be created, with leading positions both in the country and abroad.

The events up to now show that after a series of acquisitions and mergers a new banking map of the country is being outlined. Credit Agricole chose Alpha Bank during the negotiations for the purchase of Emporiki bank; Piraeus bank negotiated with the French Societe Generale for the acquisition of Geniki Bank. A development is also expected on the case of TT Hellenic Postbank, which also has an extensive network of branches and a large customer base.

At the beginning of the last decade, Alpha Bank's chairman Yiannis Kostopoulos said that "two and a half banks" will remain in Greece, underlining the mergers and acquisitions, and the current events support his prognosis. There are a number of leading banks which play a role in the process: Eurobank and Piraeus Bank are competing with Alpha Bank as to which of them will gain more mergers and acquisitions. Alpha Bank has so far made only one such transaction, albeit of significant value - in 1999 it acquired a 51% stake of the Ionian Bank from Emporiki Bank - and in parallel with that, it has taken part in three historical attempts for consolidation in the country. Now with Emporiki this is the second attempt for a merger. Two of the attempts were with the National Bank in 2001 and in 2011 and the third was with Eurobank in 2011.

Tags: National Bank Eurobank takeover
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