BBVA launches take-over bid for Turkey’s largest private bank Garanti

SPANISH bank BBVA launches take-over bid for Turkey’s largest private bank Garanti at an expected cost of €2.25 billion.

If the bid is approved by Turkish Authorities, it will purchase the 50.15 per cent of Garanti that it does not already hold and as it is offering a 34 per cent premium over average share price, it is confident that shareholders will accept the deal.

In the event that not all shareholders do agree, then BBVA will still be able to increase its stake in the Turkish bank even without a take-over.

The Board of BBVA believe that Turkey is a good market to invest in and that the long-term results, should the sale be agreed will be good for the Spanish bank and its own shareholders.

BBVA Research estimates that the country’s GDP has a growth potential of 3.5 per cent per annum and it is an important partner for Europe as in 2020, 56 per cent of Turkish exports went to this continent.

In addition, it believes that growth opportunities in the banking business are very high as household debt accounts for 17 per cent of Turkey’s GDP, compared to an average 69 per cent for the European Union.

It is probably no coincidence that Turkish born Onur Genç who was appointed CEO of BBVA Spain in 2019 had previously worked in Garanti has an in depth knowledge of banking in Turkey and sees that Country as a good investment home for the money raised from the sale of a BBVA American subsidiary.

BBVA remains the second largest bank by assets in Spain despite recent mergers by competing Spanish banks.

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