Slovenia is set to sell Abanka bank to another domestic lender Nova Kreditna Banka Maribor (Nova KBM), as a part of its privatisation efforts of the banking industry.

Under the terms of the agreement, Nova KBM will acquire 100% shares of Abanka from the Slovenian Sovereign Holding (SSH).

According to a Reuters report, the deal is valued at around €444m ($501m).

SSH selected Nova KBM through a competitive sales process after the latter submitted the ‘best offer’ for the acquisition.

Nova KBM Management Board president John Denhof said: “This historic moment is an incredible opportunity for us and for Abanka to create a stronger combined bank, which is positive for the Slovenian economy.

“With the acquisition of Abanka, we are making great progress towards realizing our strategy, which is based, among others, on objective such as growth, profitability and client excellence.”

Abanka is Slovenia’s third largest bank by total assets. It offers diverse range of financial services including retail, corporate banking and private banking services.

On the other hand, Nova KBM is the second largest bank in the country. Apollo Global Management owns 80% stake in the lender, while the remaining 20% is owned by EBRD.

Once the transaction is complete, the combined bank is estimated to hold a market share of 22.5%.

Slovenia largest bank Nova Ljubljanska Banka (NLB) holds around 23% of market stake.

The Abanka acquisition is expected to close before the end of the year, subject to regulatory approvals and mandatory authorisations.

The Slovenian banking industry narrowly escaped an international bailout in 2013 with a capital injection from the government. Subsequently, the government started privatisation of the banks.

In February this year, the Slovenian government reiterated its commitment for bank privatisation.