Sberbank buying DenizBank for $3.53 bln
MOSCOW. June 8. (Interfax) - Sberbank of Russia is buying Turkey's DenizBank for 6.47 billion lira ($3.53 billion), said the seller, Dexia Group.
DenizBank's subsidiaries in Austria and Russia are also included in the deal.
Istanbul just hosted an official signing of documents for the deal, an Interfax correspondent reported from the scene.
Afterwards, Sberbank Chairman German Gref told reporters that DenizBank had been valued at 1.33 times its capital, based on the $3.5 billion price tag.
"The purchase price was agreed at 6.479 million Turkish lira for 100% of the bank, which amounts to around $3.5 billion at the current exchange rate. This amount is equivalent to a multiplicator of 1.33 of price to book value [value against bank capital] for the first quarter of 2012," Gref said.
Sberbank is buying 99.85% of the stock in the Turkish bank. The plan is to wrap up the deal before year-end, Gref said.
"We agreed to buy 99.85% of the stock in DenizBank, and the remaining roughly 0.15% is on the market. We will be acting in relation to that in correspondence with Turkish law," Gref said.
Sberbank expects the proportion of net profits earned abroad to increase to from 7% to 8% with the purchase of DenizBank, Gref said.
"With this purchase we see that we have the opportunity to earn 7%-8% of our net profits abroad," he said.
According to bank strategy, the group is looking to increase proportion of net profits earned abroad by at least 5% by 2014, Gref said.
However, Gref admitted that his bank's purchase of the Turkish bank could lower Sberbank's capital adequacy by 0.6 percentage points.
"Naturally, our capital will decline, but the influence on our capital will not be very significant - roughly 0.6 percentage points," he said, noting that the purchase "will not have a dramatic impact on capital."
DenizBank ranks as tenth by assets among Turkish banks. It has some five hundred branches and a 2.8% share of the deposit market.
Sberbank's consultants were Rothschild, Deutsche Bank, and Troika Dialog , and Dexia's was Bank of America Merrill Lynch.
Sberbank first began eyeing DenizBank last year. But in December it was reported that a buy was not forthcoming due to market volatility. Gref said in an interview with business daily Kommersant in May that, "the market situation has changed, and we again are looking at the possibility of acquiring this asset."
Other potential contenders for the bank were HSBC and Qatar National Bank.
Back in February, Sberbank wrapped up its first acquisition outside the Commonwealth of Independent States - Volksbank International, which operates in the Czech Republic, Slovakia, Hungary, Croatia, Serbia, Bosnia and Herzegovina, Slovenia, and Ukraine. Sberbank plans therewith to set up its own international platform.
