Georgia’s TBC Bank Group has agreed to acquire Societe Generale's 93.64% stake in JSC Bank Republic in a £103m ($136.8m) deal.
The acquisition will lead to the creation of the largest bank in Georgia by loans and deposits, increasing TBC Bank's loan market share by 7.3% to 35.7% and the deposit market share by 5.3% to 34.5%.
The deal will also strengthen TBC Bank’s position in all operating units with special strengths in retail banking, including among affluent customers, TBC Bank said.
TBC Bank will pay 70% of the deal consideration in cash from own funds and 30% in newly issued TBC Bank shares.
Following the acquisition, which is anticipated to be wrapped up before the end of 2016, Societe Generale will become a 5.4% shareholder in TBC Bank with a holding period of one year that can be waived by TBC Bank at its discretion.
TBC Bank has already started preliminary talks to acquire the remaining 6.36% stake, which is owned by the European Bank for Reconstruction and Development (EBRD).
TBC Bank CEO Vakhtang Butskhrikidze said: “We believe that the acquisition of Bank Republic is a critical step in delivering on TBC Bank’s strategy and represents a major step forward in TBC Bank's ambition to build the leading banking group in Georgia and the broader Caucasus region.
“Bank Republic is an excellent strategic fit for TBC Bank given its focus on the mortgage and consumer lending segments, complemented by an attractive product offering for large multinationals operating in Georgia.”
Bank Republic focuses on unsecured consumer and mortgage lending, and comprises 41 branches and 159 ATMs. The bank employs 972 full time staff, and managed GEL1.7bn of gross assets, net loans of GEL1.2bn, customer deposits of GEL0.7bn and total equity of GEL0.3bn as at December 2015.
Bank Republic CEO Antoine Gabizon said: “TBC Bank’s consolidation of Bank Republic’s operations has strong industrial logic and will bring significant benefits in terms of market leadership and customer servicing. We are delighted to transact with such a motivated and professional management team and believe that we have selected the best partner for our subsidiary in Georgia.”
Further, TBC Bank has also agreed to acquire selected assets and liabilities of Georgia’s JSC Progress Bank.