Piraeus Bank management is confident that the acquisition of MBG offers significant synergies to the enlarged Group and facilitates its forthcoming recapitalisation. Mr. Michalis Sallas, Chairman of the Board of Directors of Piraeus Bank Group, stated: "Following the acquisition of ”good” ATEbank and Geniki Bank last year and, most recently, the acquisition of loans and deposits of Greek operations of Bank of Cyprus, Cyprus Popular Bank and Hellenic Bank, Piraeus Bank continues to play a leading role in the restructuring of the Greek banking sector. The acquisition of MBG further strengthens our capital position and earning generation capability, while the BCP investment into Piraeus Bank brings us over the minimum 10% threshold private sector participation in the upcoming recapitalisation which is a prerequisite for the Bank to maintain its private character. We are confident that we can achieve an even higher participation of private investors, in this landmark rights issue of Piraeus Bank". This agreement falls within the framework set up by the Bank of Greece and the Hellenic Financial Stability Fund (HFSF) aiming at the restructuring of the Greek banking system and strengthening its financial stability. The terms and conditions of the transaction have been approved by the HFSF. The transaction is expected to be completed in the second quarter of 2013 and is subject to final regulatory approvals.
Description of the transaction and key terms. The key elements of the transaction are the following:
Strategic rationale The acquisition of MBG will further bolster Piraeus Bank’s viability through the creation of synergies from the integration of MBG onto Piraeus Bank’s platform. This transaction, combined with the contemplated €400mn investment by BCP into Piraeus Bank, is expected to further enhance shareholder value and strengthen the financial and strategic position of Piraeus Bank, thus, increasing the attractiveness of Piraeus Bank for private sector investors and the value offered to investors, including the HFSF, in the context of the forthcoming recapitalization. By acquiring MBG, Piraeus Bank acquires a fully capitalized bank in line with Bank of Greece requirements. Piraeus Bank is uniquely positioned to enhance significantly the MBG platform based on Piraeus Bank’s best practices, leveraging upon the expansion into specific target groups and alternative channels, maximizing the synergies that will result from its integration into Piraeus Group.
With this transaction, Piraeus Bank (pro-forma as of 31 December 2012):
Following this acquisition, Piraeus Bank Group pro forma total assets will amount to c. €103 bn, net loans to c. €67 bn and customer deposits to c. €55 bn. On a pro forma basis, Piraeus Bank Group will employ c. 25,000 people and the total branch network will amount to 1,765 units, with a presence in 10 countries in addition to Greece. Barclays Bank PLC, acting through its investment bank, Deutsche Bank AG, London Branch, and Lazard Freres are acting as financial advisors to Piraeus Bank for the transaction.
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