Emporiki Bank buyout to boost Alpha?s capital

Alpha Bank has finally been chosen as the suitor for French group Credit Agricole?s Greek subsidiary, Emporiki Bank.

Credit Agricole confirmed on Monday that a confidentiality agreement will be signed with Alpha and that talks will start with an aim for completion by the end of the year. Officials from the two groups said a deal will be signed shortly.

There will be no negotiations in the strict sense of the term. The deal will require clearance by the Hellenic Financial Stability Fund (HFSF), one of Alpha?s main shareholders, after the lender?s recapitalization, as well as from the competition authorities. As soon as they issue their approval, the final deal will be signed.

With the acquisition of Emporiki, Alpha Bank is taking a leap toward retaining its private character while decisively strengthening its domestic presence. It should require less than 1 billion euros to bolster its capital, an amount that it should be able to draw from the market without resorting to the state for further recapitalization.

The benefits for Alpha are huge and, according to analysts, the bank?s capital requirements are now much lower. For the symbolic price of 1 euro, Alpha will secure funds of 3 billion euros, while the synergies created by the merger will amount to 1 billion euros in the long term.

The Greek lender announced on Monday that besides the recapitalization of Emporiki by Credit Agricole, amounting to 2.3 billion euros, the French group will add another 550 million euros before the sale to Alpha, as well as acquiring an Alpha bond of 150 million euros.

Alpha won the race that National and Eurobank had also entered as it reportedly had smaller capital requirements and a lower dependence on the Eurosystem compared to its two rival suitors.

The presence of Qatar among its shareholders also played its part, as it constitutes one of the biggest and most reliable investors internationally.

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