An adviser on the deal said that it provides an example of how Western European banks are missing out on growth opportunities due to being embroiled in the region’s debt crisis.
At a stroke, the move gives Sberbank, which is majority-owned by the Russian government, a platform for expansion across eight countries in central and Eastern Europe. It has 600,000 customers and 291 branches in countries that include Croatia, Slovakia, Serbia, Hungary and the Czech Republic.
Sberbank will spend €585m-€645m on the assets, with the exact price to be determined by their book value when the sale goes through in December.
Stefan Goetz, who led the Société Générale team advising on the sale, said: “This transaction is a sign of the times. It’s the first major financial institutions acquisition into the central and Eastern European region from the east rather than from the west.
“There is currently a distinct divide in terms of valuation and acquisition currency, between banks in... emerging markets and those in the Western world who are hampered by the Eurozone crisis,” he added.
Sberbank will fill a €2.5bn funding gap out of its own pocket, while VBI will plug the remaining €500,000 gap with a loan to its buyer. The Russian bank is on the lookout for more purchases as part of an effort to become a major international player.
The Russian government is also keen to privatise a 7.6 per cent stake in the lender, but it is not clear if it will push ahead with plans to do so this September due to turmoil in the equity markets.
Sberbank was also advised by JP Morgan and its own in-house investment bank, Troika Dialog, on the deal.
MEET THE ADVISERS: SOCIÉTÉ GÉNÉRALE
Stefan Goetz has been leading Société Générale’s (SocGen) push to expand both its mergers & acquisitions (M&A) and financial institutions advisory business in Europe.
So far this year, he has advised on Deutsche Bank’s acquisition of Postbank and the merger of NYSE Euronext and Deutsche Boerse.
He was also involved in the creation of Caixa Bank, as part of Spain’s restructuring of its banking sector. The deal, which involved a swap of industrial for financial assets, created Spain’s third-largest listed lender after BBVA and Santander.
Goetz has spent all of his career working on financial institutions deals and, before moving to SocGen, was head of corporate strategy and M&A at Credit Suisse in Zurich and Hong Kong.
He began his investment banking career in London in 1994.