Dubai’s largest bank Emirates NBD has announced a definitive agreement to acquire a 99.85 per cent stake in Turkish private bank DenizBank from Russia’s Sberbank for TRY14.6bn ($3.19bn).
The deal represents a coup for Emirates NBD amid reports that it had been met with resistance from Turkish President Tayyip Erdogan, who sided with Qatar against the UAE, Saudi Arabia and Bahrain in last year’s Gulf dispute.
The company’s shares ended Tuesday up 8.4 per cent, having risen 30.5 per cent so far this year, according to Reuters.
Emirates NBD said the agreement was based on DenizBank’s equity capital as of October 31. It will pay interest on the consideration period between October 31 and the closing date.
All profits during this period will go to Emirates NBD’s account.
It will also assume ownership of DenizBank’s subordinated debt previously provided by Sberbank.
“The transaction represents a significant milestone for Emirates NBD and is expected to be accretive to shareholders in the first year. Denizbank is a well managed and prominent organisation in the Turkish banking market, which with the current deal structure, comes at a reasonable price on acquisition for Emirates NBD,” said Emirates NBD group CEO Shayne Nelson.
DenizBank is Turkey’s fifth largest bank with assets of TRY169.4bn ($37bn), customer loans of TRY119.2bn ($26bn) and deposits of TRY115.7bn ($25.2bn) in the first quarter.
The bank has 14,100 employees, 5,900 ATMs and 751 branches, with 43 outside of Turkey in Austria, Germany, Bahrain, Moscow and Cyprus, and services around 11.8 million customers.
The transaction is subject to regulatory approval in Turkey, Russia, the UAE and other jurisdictions and is expected to close this year.
As a result of the deal, Sberbank will cease to be a shareholder in DenizBank.
Emirates NBD said the agreement would increase its international presence to 13 markets and international assets to more than 30 per cent of its consolidated post acquisition balance sheet.