Financial services provider KBC has announced that it is to acquire a majority stake in Russian independent mortgage lender Absolut Bank. The total purchase price values the bank at E761 million, 3.8 times the company's book value.
Under the terms of the transaction, KBC will acquire a minimum of a 92.5% stake in the Russian firm. The deal is subject to regulatory approval by the Central Bank of Russia and the Anti-Trust Commission. KBC expects the transaction to close during the third quarter of 2007.
The acquisition is in line with KBC’s current strategy to expand internationally. This transaction will allow the group to gain a foothold in a new emerging European market. The acquisition will not affect the company’s current share buy-back program.
Over the past decade, KBC has built up a strong presence in many of the countries that joined the EU in May 2004 and January 2007. KBC’s long-term strategic plans entail further expansion in the markets of emerging Europe. Russia is therefore an extension of our existing presence in neighboring central and eastern Europe, commented Andre Bergen, KBC Group CEO.
Absolut Bank is a well managed, fast growing, independent bank that constitutes an ideal platform for KBC’s long-term presence in this fast-growing market. The bank has a good track record in risk governance. As a rule, KBC will strengthen this governance by applying its own high standards, he continued.