EFG Eurobank to Buy 70 Pct. of Tekfenbank
Greece (AP) - Greece's EFG Eurobank Ergasias said on Monday it agreed to buy a 70 percent stake in Turkey's Tekfenbank for US$182 million (euro143.4 million).
This is the second foray in recent weeks by a Greek bank into Turkey. In April, National Bank of Greece said it would buy a 46 percent stake in Finansbank for euro2.3 billion (US$2.9 billion).
Eurobank, Greece's second-largest bank by market capitalization, said it set the total valuation of Tekfenbank at US$260 million (euro205 million), based on a net asset value estimated at US$80 million (euro63 million).
After announcement of the deal, EFG Eurobank shares in Athens were trading up euro0.18, or 0.6 percent higher, at euro32.68 at 1140GMT.
The transaction is subject to regulatory approval and is expected to be completed in the third quarter this year.
As part of the deal, Tekfenbank will buy full ownership of Eurobank's EFG Istanbul Securities unit.
EFG said it expects both the Turkish economy and banking sector to enjoy high growth rates over the medium term, and Tekfenbank offers a strong operating platform to enter the market.
EFG said Tekfenbank has 30 branches covering the most affluent areas of Turkey. The bank focuses on small and medium sized business customers.
The Greek bank added that Tekfenbank's medium-term strategy envisages attracting additional customers, extending its distribution network, increasing per-customer exposures and driving the cross-selling of products.
Tekfenbank will also move into new growth businesses such as mortgages and asset management.
Tekfen Group will continue as a strategic shareholder in Tekfenbank, owning almost all of the remaining shares.
EFG said that the privately owned Tekfen Group -- active in financial services, real estate development and the agricultural industry -- had total assets in 2005 of US$1.6 billion (euro1.26 billion) with sales of US$936 million (euro737.7 million).
HSBC Group advised Tekfen Group on the stake disposal, while EFG Istanbul Securities advised EFG Eurobank
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