Setting the Stage
UniCredit and Alpha Services & Holdings have recently announced their decision to merge their subsidiaries in Romania and establish a commercial partnership in Greece. This strategic move signifies a significant development in the banking industry and solidifies their presence in both markets.
The Romanian Merger
This merger will result in the creation of the third-largest bank in the Romanian market, boasting a combined 12% market share by total assets. The newly formed entity will provide enhanced banking services and capitalize on the strengths of both subsidiaries. Alpha Bank Romania is set to retain a 9.9% share capital of the combined entity and receive a substantial cash consideration of 300 million euros ($317.9 million). Pending necessary approvals, the closing of the merger is expected to take place in 2024.
Expansion in Greece
As part of this collaboration, UniCredit will acquire a majority stake of 51% in AlphaLife Insurance Company. This subsidiary operates within the pension and savings segment and further enhances UniCredit's presence in the Greek market. However, the final agreement is still subject to a due-diligence process and regulatory approvals.
Additional Opportunities
In a separate offer, UniCredit has expressed its interest in buying a 9% stake in Alpha from the Hellenic Financial Stability Fund, further expanding their influence in the Greek market.
Projected Impact
While this merger will affect UniCredit's common equity tier 1 ratio by roughly 15 basis points, it also presents significant growth opportunities. Combined with the commercial partnership formed through this collaboration, it is expected to result in an increase of over EUR100 million in net profit on a run rate basis.
These recent developments highlight the commitment of both UniCredit and Alpha Services & Holdings to evolve and strengthen their positions in both Romania and Greece's financial landscapes.
