(Alliance News) - Bank of Georgia Group PLC on Monday said that it will acquire Ameriabank CJSC, opening the door into one of the Caucasus region's "fastest-growing economies".
Following last week's announcement that it was in talks with Ameriabank regarding a potential acquisition, Bank of Georgia confirmed the signing of a conditional agreement to acquire the leading Armenian bank for USD303.6 million.
Bank of Georgia said that the Yerevan-based bank has "an attractive franchise, in an attractive market, with similar characteristics to Georgia".
The deal possesses "significant upside potential", the group said, and Bank of Georgia believes that there is scope for growth in the bank's retail performance and customer base.
The acquisition is conditional upon regulatory and shareholder approvals, the latter of which Bank of Georgia will seek at a general meeting on March 14. According to the acquisition timetable, the deal will be completed on the third business day following this general meeting.
Bank of Georgia said that it was fully funded for the USD303.6 million deal. Upon completion, 90% of Ameriabank will be acquired, with a 10% shareholding to be retained by the European Bank for Reconstruction & Development.
Bank of Georgia Chair Mel Carvill said: "This transaction is a significant milestone for the group and a new chapter in our strategic development. Through Ameriabank we are set to enter Armenia, one of the fastest-growing economies in the region. Ameriabank has a well-regarded and experienced management team, and I am delighted that they will stay on after the transaction is closed. "
Shares in the firm were up 2.5% at 4,065.00 pence each in London on Monday morning.
By Hugh Cameron, Alliance News reporter
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Bank Of Georgia Group (BGEO)