BBVA has completed its takeover bid to increase its stake in the Turkish subsidiary Garanti. The bank chaired by Carlos Torres had 49.85% before the proposal, a figure that has now increased to 85.97% of the entity’s share capital, as reported this Wednesday to the National Securities Market Commission ( CNMV). At first, it offered a price of 12.20 Turkish liras per share, although on April 25 it raised its offer to 15 liras per share. The cost of the purchase of shares was 22,758 million Turkish liras (about 1,410 million euros).
The great objective of BBVA was to exceed 50% of the participation, which allows it to continue increasing its shareholding weight later without having to launch a new public offer. An end that has far exceeded. “Capital consumption has been around half: about 23 basis points (equivalent to just over 700 million euros),” explains the bank in a statement.
The operation was launched on the market after BBVA sold its business in the United States for 9.7 billion euros in November 2020 and after the subsequent purchase attempt of Banco Sabadell failed for refusing to pay some 2.5 billion euros in shares. An offer that at first could cost the entity about 2,250 million, a figure that was later lowered to about 1,600 million euros due to the strong devaluation of the lira between November last year and the end of March 2022.
With this operation, the bank chaired by Torres strengthens its position in Turkey, a risky bet for the country’s economic situation. Despite this, the bank is confident in its growth margin and considers it “strategic” in its future plans. At the last shareholders’ meeting, both the president and the CEO, the Turkish Onur Genç, defended the operation. “Within this market, Garanti BBVA is the best bank in Turkey, with a proven ability to generate results, even in difficult years, in complex environments such as the ones we have been experiencing for many years,” they stressed.
BBVA began operating in Turkey in 2011, when it bought 25.01% of Garanti from Dogus and General Electric. Later, in 2015, he became the bank’s largest shareholder, increasing his stake to 39.9%. And in 2017 it reached the 49.85% it had at the beginning of this takeover bid, which does not include two Garanti subsidiaries —Garanti Faktoring and Garanti Yatırım Ortaklığı—, which are listed on the Istanbul Stock Exchange. These two firms each represent less than 1% of the Turkish group’s consolidated assets. At the end of March, the bank had 21,680 employees, 5,606 ATMs and 1,003 branches.
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