TBC purchases the controlling stake of Bank Republic; this acquisition makes TBC Bank the #1 Bank in the market in terms of deposits and loans.
TBC Group and French Societe Generale signed an agreement under which TBC Bank purchases 93.64% of Bank Republic's shares for GEL 315 million. This is the largest transaction in the history of the Georgian banking sector and is a very significant event in the Georgian financial market. The purchase of Bank Republic is completely in line with TBC Bank's strategy and creates a great opportunity for synergy, as Bank Republic is a stable financial institution which has established itself among the country's five leading banks.
TBC Bank will purchase 93.7% of Bank Republic's shares (100% of Societe Generale's share in the bank) for GEL 315 million: 70% of this amount will be paid in cash, 30% will be paid with TBC Bank's newly issued stocks. As a result, Societe Generale will hold 5.4% of TBC Bank's shares and will become one of the largest shareholders of TBC Bank. The parties also agreed to deepen their cooperation in Georgia in the future.
The remaining 6.36% of Bank Republic's shares belong to European Bank for Reconstruction and Development and TBC Bank has already started negotiations on the buyout of these shares.
As a result of the merger:
The transaction will be finalized by the end of 2016. TBC Bank's exclusive financial advisor is J.P.Morgan; Baker and Mckenzie LLP provide legal advising for this transaction.
"We believe that the acquisition of Bank Republic is completely in line with TBC Bank's long-term strategy and is a step forward towards our goals to become a leading bank in Georgia and in the Caucasus region.
TBC Bank's management team has a unique experience in such integrations and we possess the necessary resources to offer the best service to customers through the merger of these two businesses.
We are looking forward to welcoming Bank Republic's employees to our team. They will help us to successfully continue our banking activities and to offer best service to customers, now as the largest bank in Georgia. We have common goals and we are glad that we have been given an opportunity to grow and develop together, "– says TBC Bank's CEO Vakhtang Butskhrikidze.
"The consolidation of TBC Bank and Bank Republic is based on a strong industry logic and it will bring significant benefit to the Georgian banking sector in terms of leadership and service improvement. We are glad to have handed our shares to such a motivated team of professionals as TBC Bank's management team. We believe we have chosen the best partner for our subsidiary in Georgia.
We are looking forward to finalizing the transaction and are fully ready to cooperate in order to ensure a smooth transition.
"According to Societe Generale's estimation, as a result of the acquisition of Bank Republic, Georgia's banking sector remains strong, well managed, well regulated and transparent. The current share of the Group in TBC Bank emphasizes its interest in Georgian banking field. As a result of this transaction a larger bank has been created in a very attractive Georgian banking market, which falls within Societe Generale's wider strategy to concentrate on core business and geography," – says Bank Republic's CEO Antoine Gabison.
In addition, TBC Bank announces its plans to purchase selected shares in the assets (with a market value of GEL 108 million) and deposits (with a market value of GEL 108 milliom) of JSC Progressbank. This transaction represents 1.6% of total assets for TBC Bank.