Sberbank and Emirates NBD sign definitive agreement for the sale and purchase of 99.85% of shares in Denizbank A.S.

3 Min | 22 May 2018

Emirates NBD Bank PJSC (Emirates NBD) and Sberbank of Russia (Sberbank) announce that they have entered into a definitive agreement whereby Sberbank will sell its entire 99.85% stake in Denizbank A.S. (Denizbank) to Emirates NBD.

May 22, 2018, Dubai, Moscow, Istanbul – Emirates NBD Bank PJSC (Emirates NBD) and Sberbank of Russia (Sberbank) announce that they have entered into a definitive agreement whereby Sberbank will sell its entire 99.85% stake in Denizbank A.S. (Denizbank) to Emirates NBD. Upon closing of the transaction, Sberbank will cease to be a shareholder in Denizbank.

Left to right:
Hesham Abdulla Al Qassim - Vice Chairman and Managing Director, Emirates NBD and Lev Khasis - Deputy CEO, Sberbank

In accordance with the signed agreement, the consideration for 99.85% equals Turkish Lira (TRY) 14.6 billion under a locked box mechanism, based on consolidated equity capital of Denizbank as of October 31, 2017. In addition, Emirates NBD will pay interest on the consideration for the period between October 31, 2017 and the transaction closing date. All profits from the locked box date till closing date will be to Emirates NBD’s account. As part of the transaction, and on closing, Emirates NBD will assume ownership of Denizbank’s subordinated debt previously provided by Sberbank.

The closing of the transaction is subject to regulatory approval in Turkey, Russia, the United Arab Emirates (UAE) and other relevant jurisdictions where Denizbank operates. The transaction is expected to close in 2018.

Denizbank, headquartered in Turkey, is the fifth largest private bank in the country, with assets of TRY 169.4 billion, loans to customers amounting to TRY 119.2 billion, deposits amounting to TRY 115.7 billion as on March 31, 2018. The bank operates through a network of 751 branches, with 708 branches in Turkey and 43 in other territories (Austria, Germany, Bahrain, Moscow and Cyprus), servicing around 11.8 million customers, through almost 14,100 employees and 5,900 ATMs.

“Denizbank is one of the most attractive assets in the Turkish banking sector. We highly value the management team and the results achieved during our ownership of Denizbank since 2012.
The decision to sell Denizbank is prompted by a change in Sberbank Group’s international strategy and will allow us to focus further on development of ecosystem of Sberbank.” said Herman Gref, CEO of Sberbank.

At the transaction completion Sberbank expects positive effect on capital adequacy ratios under both Russian Accounting Standards and International Financial Reporting Standards (IFRS). The actual financial effects of the transaction for Sberbank are dependent on dynamics of currency exchange rates, as well as on timing between the transaction signing and closing. Denizbank equity capital at a locked box date – October 31, 2017 – amounts to TRY 12.5 billion.

“Through this transaction, Emirates NBD will establish itself as a leading bank in the Middle East, North Africa and Turkey (MENAT) region and achieve meaningful diversification of its operations, both in new countries and in a broad range of business segments”, Hesham Abdulla Al Qassim, Vice Chairman and Managing Director, Emirates NBD commented. He further stated that Emirates NBD supports Denizbank’s proven strategy to achieve sustained and profitable growth in its established markets and operating segments, by adequately leveraging its strong and experienced local management and market leading digital capabilities.

Shayne Nelson, Group CEO, Emirates NBD said, “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 organization in the Turkish banking market, which with the current deal structure, comes at a reasonable price on acquisition for Emirates NBD.”

Denizbank equity capital amounts to TRY 13.7 billion as of March 31, 2018. Emirates NBD will increase its international presence to 13 markets and international assets will exceed 30% of the consolidated post acquisition balance sheet.

Left to right:
Neeraj Makin - Head of Group Strategy Emirates NBD, Ruslan Abil - CFO Denizbank ,
Surya Subramanian – Group CFO Emirates NBD, Shayne Nelson - Group CEO Emirates NBD,
Hakan Ateş - CEO DenizBank, Hesham Abdulla Al Qassim - Vice Chairman and MD Emirates NBD,
Lev Khasis - Deputy CEO Sberbank, Igor kolomeisky - Head International Sberbank

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