Alfa Bank: what the agreement with UniCredit stipulates

Alpha Bank and UniCredit announced the merger of their subsidiaries in Romania and the realization of strategic cooperation in Greece.

Special announcement:

• The merger of the Romanian subsidiaries of the two banks creates the third largest bank in the Romanian banking market based on total assets, strengthening UniCredit’s presence in a large and growing market. Alpha Bank maintains a 9.9% stake in the new scheme.
• Formation of a framework for a commercial agreement in Greece for the distribution of portfolio management and life insurance products, linked to the mutual fund units (linked unit) of UniCredit, to 3.5 million clients of Alpha Bank, and the establishment of a joint scheme for the sale of pension and insurance products, through the acquisition of 51 by UniCredit % of Alpha Life.
• An offer from UniCredit to the Financial Stability Fund for all the shares it currently holds in Alpha Services and Holdings.

Stick in THF

Commenting on the mega deal announced today by Alpha Bank, Kostis Hatzidakis, Minister of National Economy and Finance, said: “The government welcomes UniCredit’s decision to invest in Alpha Bank.”

The Minister of Finance confirms that the task has now been handed over to the Financial Stability Fund, which will work in accordance with its statute and the procedures stipulated in this regard.

“However, the fact that a major European bank is investing in the Greek banking system after so many years is evidence that both the Greek banking sector and the Greek economy have entered a path of perspective and growth. This positive development is the result of systematic work that the government is determined to continue.” “.

“The government welcomes UnitCredit’s decision”

Leader in the Romanian market

As reported, with the merger of the subsidiaries of the two banks in Romania, the third largest bank in the Romanian banking market was created
on a total assets basis, strengthening UniCredit’s presence in a large and growing market. In the new structure, Alpha Bank retains 9.9%.

The merger is a milestone for the local market, due to the combination of two complementary clients in a high-growth country, with UniCredit Romania.
and Alpha Bank Romania will have a strong presence in the business and retail banking sectors, respectively.

The transaction is expected to be completed in 2024, subject to prior completion of the due diligence process, relevant corporate decisions on the merger as well as all required regulatory consents and approvals, including Competition Commission approval.

Upon completion of the transaction, Alpha Bank is expected to (i) retain 9.9% of the equity in the new entity and (ii) receive cash consideration of
300 million euros The final amount of the price is subject to adjustment based on the results of the due diligence audit regarding product quality.
Assets, if any.

Review the terms of the agreement in detail

Business partnership to distribute bancassurance, asset management and other banking products

Alpha and UniCredit have also agreed on the basic terms of:

a) UniCredit’s acquisition of 51% of the share capital of AlphaLife Insurance Limited (“AlphaLife”), a 100% subsidiary of Alpha Life Insurance Company active in the retirement and savings products sector,

b) Distribution of UniCredit onemarkets mutual funds through the Alpha Bank network, serving more than 3.5 million clients in Greece.

This partnership will leverage UniCredit’s expertise and product diversification in asset management and bancassurance products, while serving as a catalyst to further develop AlphaLife’s capabilities and expand its wealth management services to include Alpha’s client bank.

The new partnership demonstrates the ability of UniCredit’s services to provide added value to collaborating parties, while confirming its commitment to emerge as a European bank offering its high-quality products to new markets.

Both parties will explore further collaboration opportunities to support the needs of their clients in their countries of presence, leveraging their combined strong international footprint as well as their recognized capabilities in individual markets, lending and trading, syndicated lending, advice and other services to clients. Business, in addition to developing other banking services and products.

The final agreement for the business partnership is subject to the completion of the due diligence review, the approval of the relevant corporate decisions on the merger and all required regulatory approvals and consents, including the approval of the Competition Commission.

Buying a strategic stake in Alpha from UniCredit

UniCredit today made an offer to the Financial Stabilization Fund (“HFS”) to purchase, in accordance with HFSF’s divestment strategy and procedures, all 9% of shares currently held by HFSF in Alpha. The deal will have a minimal impact on UniCredit’s CET1 capital adequacy ratio.

If the process with the HFSF is not completed, UniCredit commits to purchase through the market a share of shares equal to the lesser of 5% or a different percentage of the shares generated by UniCredit’s investment for the total pre-agreed amount over the next 24 months. .

The benefits of long-term strategic cooperation across all geographic regions and banking products

This transaction allows UniCredit to strengthen its presence in Romania, a country with high growth prospects, and expand its presence and distribution of its products in Greece, a country also with strong growth potential. Greece, following the structural reforms of recent years, is once again emerging as a country with strong prospects and high growth rates, making it an important hub for the UniCredit network in Central and Eastern Europe, given its trade ties between Greece and the wider region. Based on trade and tourism.

The collaboration with UniCredit supports Alpha Bank’s strategy and enhances the dynamics of its network, while expanding the solutions and services offered accelerates the achievement of its business plan objectives. In addition, it strengthens Alfa Bank’s customer service capabilities, through knowledge sharing and leveraging the entire UniCredit product range, its long-standing presence in the Italian and German markets, as well as its wide reach. Network in the middle and
Eastern Europe.

The merger of subsidiaries in Romania is expected to impact UniCredit’s CET1 ratio by approximately 15 basis points and, together with the business partnership based on the high potential of new products and services, is expected to increase, on a current basis, by more than EUR 100 million net. UniCredit profitability. For Alpha Bank, the overall deal keeps net profit forecasts unchanged while increasing capital buffers by
More than 100 basis points, resulting in return on equity (RoTE) rising by at least 50 basis points, with the potential for further rise, stemming from the trade deal.

source: ot.gr