Burgan Bank signs Share Purchase Agreement (SPA) with Eurobank EFG to acquire Eurobank Tekfen

Press release

Published April 9th, 2012 - 12:01 GMT

During the agreement

Burgan Bank, one of Kuwait’s leading banks with a regional presence in Jordan, Iraq, Algeria and Tunisia, announced today that it has entered into an agreement with Eurobank EFG to acquire a 99.26% stake in Eurobank Tekfen, Turkey. Under the terms of the SPA, Burgan Bank has agreed to acquire the stake for a consideration value of TRY641mn KD99million representing 0.98x based on September 30^th 2011 shareholders’ equity. In addition, Burgan Bank has also agreed to acquire an additional portfolio of Turkish loans from EFG amounting to EURO 214 million KD78million. The total consideration will be funded fully from Burgan’s existing internal cash resources. The final execution of the transaction is subject to regulatory approvals from Central Bank of Kuwait CBK and Turkey’s Banking Regulation and Supervision Agency BRSA.

Eurobank Tekfen was established in 1989 by Tekfen Group as an investment and finance bank. EFG acquired a 70% stake in the Bank in 2007 to further its regional presence. As at 30 September 2011, Eurobank Tekfen had total assets of TRY5,428mn, net customer loans of TRY2,190mn, customer deposits of TRY2,075mn and shareholders’ equity of TRY660mn.The Bank has extensive geographic coverage within Turkey through its network of 60 branches.

The Turkish economy and banking sector have continued to demonstrate significant positive performance and resilience throughout the global financial crisis and offer opportunities for continued long term expansion. Turkey’s large, growing and young population, combined with strategic positioning between Europe and the Middle East offers strong potential for further economic growth in the medium-to-long term, with increasing business flows with the Middle East.

Citigroup Global Markets Limited acted as the exclusive financial advisor for Burgan Bank on this transaction

Background Information

Burgan Bank

Established in 1977, Burgan Bank is the youngest conventional Bank and second largest by assets in Kuwait, with a significant focus on the corporate and financial institutions sectors, as well as having a growing retail, and private bank customer base. Burgan Bank has majority owned subsidiaries in the MENAT region supported by one of the largest regional branch networks. which include Gulf Bank Algeria - AGB (Algeria), Bank of Baghdad - BOB (Iraq & Lebanon),Tunis International Bank – TIB (Tunisia), and fully owned Burgan Bank – Turkey, (collectively known as the “Burgan Bank Group”). Furthermore, Burgan Bank has a present in the UAE through its corporate office (“Burgan Financial Services Limited) which had helped the bank to participate in multiple financing opportunities in the UAE.