UniCredit SpA offered to buy the Greek state’s 9% holding in Alpha Bank and agreed to acquire Alpha’s local unit in Romania, in a strategic deal aimed at expanding its presence in central and eastern Europe.
(Bloomberg) — UniCredit SpA offered to buy the Greek state’s 9% holding in Alpha Bank and agreed to acquire Alpha’s local unit in Romania, in a strategic deal aimed at expanding its presence in central and eastern Europe.
UniCredit, which didn’t disclose a price for the stake in Alpha Bank, sent an offer to the Hellenic Financial Stability Fund, Greece’s bank recapitalization fund created at the beginning of the country’s debt crisis, according to a statement Monday. Based on Alpha Bank’s last closing price, the stake is worth about €269 million ($285 million).
UniCredit will also pay €300 million in cash for Alpha Bank’s Romanian unit and combine it with its own to create the third-largest lender by assets in that country. Alpha Bank will retain a 9.9% of the combined entity.
UniCredit Chief Executive Officer Andrea Orcel has said the bank will consider smaller-scale acquisitions in key central and eastern European countries at the right price. The Alpha Bank deal comes just after S&P Global Ratings placed Greece in the investment grade zone, the first of the big three rating firms to do so.
Greece has started to divest from its lenders by concluding the sale of its stake in Eurobank Ergasias Services and Holdings SA in early October. It also plans to start the process for the sale of a 20% holding in National Bank of Greece next month.
Right after his reelection in June, Greek Prime Minister Kyriakos Mitsotakis pledged to maintain his business-friendly policies and reduce the share of debt to below 140% of output by 2027, from a high of 206% in 2020.
The deal is “a great start to the disinvestment process and a reflection of Greece’s regained credibility,” the Premier’s Chief Economic Adviser Alex Patelis told Bloomberg News.
The Greek government expects the economy to grow by 2.3% in 2023 and 3% in 2024, a much better performance than most of its European peers. Lenders have managed to reduce their bad loan ratio from the highs of €107 billion in 2016, in the midst of Greece’s decade-long debt crisis that shaved around a quarter of the country’s output.
The two lenders also agreed on a partnership that will see Alpha Bank distribute UniCredit’s asset management and unit-linked products to its 3.5 million clients. In addition, the firms will create a joint venture in pension-saving products, with UniCredit becoming a 51% shareholder in AlphaLife.
If UniCredit’s purchase of the government’s stake in Alpha Bank isn’t completed as planned, the Italian lender “committed to purchase on market an equity stake equal to the lower of 5% or a different percentage of shares which results from UniCredit investing an aggregate pre-agreed amount over a period of 24 months,” according to a stock exchange filing.
–With assistance from Irina Vilcu, Antonio Vanuzzo and Wout Vergauwen.
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