© Copyright Acquisition International 2025 - All Rights Reserved.

Article Image - Hungary and EBRD Acquire Minority Stakes in Erste Bank Hungary Zrt
Posted 20th June 2016

Hungary and EBRD Acquire Minority Stakes in Erste Bank Hungary Zrt

Hungary, represented by state-owned entity Corvinus Zrt. in the transaction, and the European Bank for Reconstruction and Development (EBRD) today signed the contractual framework with Erste Group Bank AG (Erste Group) to acquire minority equity stakes of 15 per cent each in Erste Bank Hungary Zrt.

Mouse Scroll AnimationScroll to keep reading

Let us help promote your business to a wider following.

Hungary and EBRD Acquire Minority Stakes in Erste Bank Hungary Zrt
Image

Hungary, represented by state-owned entity Corvinus Zrt, and the European Bank for Reconstruction and Development (EBRD) today signed the contractual framework with Erste Group Bank AG (Erste Group) to acquire minority equity stakes of 15 per cent each in Erste Bank Hungary Zrt. (EBH). Prior to the completion of the transaction, Erste Group will strengthen the capital base of EBH in order to sustainably enable the bank to provide additional lending to the Hungarian economy. 

Hungary, EBRD and Erste Group signed Memoranda of Understanding (MoU) that provided the basis for the overall improvement of the business climate in Hungary’s banking sector, allowing banks to support more lending and thus economic growth. As part of this initiative, Erste Group, currently EBH’s sole shareholder, offered the Government of Hungary and the EBRD an opportunity to invest in its local operation in Hungary.

The HUF 77.78 bn purchase price for the in total 30 per cent stake in Erste Bank Hungary was negotiated between Erste Group and the two buyers based on market valuation methods after the performance of due diligence with the support of external advisors. Following the capital increase, the purchase price translates to a P/BV multiple of 1.1. EBRD and Corvinus Zrt will pay the same price. 

Mihály Varga, Minister for National Economy of Hungary said:

“With the transaction, the most important objective of the Hungarian Government is to foster growth, by boosting lending and helping the Hungarian banking system contribute to expansion through a stable background.”

“Erste Bank had already declared its intension to significantly increase lending and has long-term plans in Hungary. This deal will further improve trust between one of the largest Hungarian banks and the Government,” he added.

EBRD First Vice President Phil Bennett commented:

“With our investment we are strengthening and supporting a private bank which has successfully overcome the effects of the global financial crisis and is committed to the region. The stronger capital base will allow Erste Bank Hungary to implement its growth plan, including lending to local SMEs, thus contributing to improved financial intermediation and supporting the real economy.”

The conclusion of the transaction, which is expected by autumn, is subject to all necessary approvals required from Hungarian and European banking supervisory and competition authorities, as well as the fulfilment of various conditions by the involved parties, including the conclusion of the capital increase by Erste Group within Erste Bank Hungary.

The parties have also agreed to a pre-determined exit mechanism for the involved minority shareholdings: the put and call option scheme grants Corvinus Zrt. the right to exit any time and Erste Group the right to exercise the call option 5 years after the sale at the earliest; in the case of EBRD, the put and call option are exercisable any time between 5-9 years after the acquisition.

Friedrich Rödler, Chairman of the Erste Group Supervisory Board in Budapest at the signing ceremony said:

“Erste Group’s decision to invite the State of Hungary and the EBRD to become minority shareholders in our Hungarian banking subsidiary reflects our positive expectations for the continued development of the Hungarian banking market. We welcome our new shareholders and we are looking forward to a successful cooperative relationship for the benefit of the Hungarian economy and its people in the years to come.”

 







Categories: M&A


You Might Also Like
Read Full PostRead - Eye Icon
Empowering Women in Finance and Demystifying the Landscape As Saxo Sees 57% Surge in Female Clients Following Lower Pricing Strategy
Finance
07/03/2024Empowering Women in Finance and Demystifying the Landscape As Saxo Sees 57% Surge in Female Clients Following Lower Pricing Strategy

As the financial sphere continues to be rocked by the effects of lockdowns, subsequent supply chain disruptions, an energy crisis and the long-forgotten notion of inflation, Camilla Dahl Hansen, Chief Experience Officer at Saxo Bank, argues now is the time to

Read Full PostRead - Eye Icon
5 Ways In Which mLearning Enhances Employee Engagement
Innovation
29/09/20225 Ways In Which mLearning Enhances Employee Engagement

There is no doubt that mobile phones have deeply entwined into our daily lives. They fulfill a wide variety of needs, from allowing us to consume quality training sessions to the ability to capture special moments or ordering our favorite dessert.

Read Full PostRead - Eye Icon
Malicious Intent Outweighs Technology as Biggest Threat to Personal Data
Legal
15/03/2019Malicious Intent Outweighs Technology as Biggest Threat to Personal Data

Against the backdrop of a complex and growing cyber threat landscape, organisations are waking up to the fact that one of the biggest chinks in their armour against a data security breach is humans. In fact, a staggering fifty two percent of respondents believ

Read Full PostRead - Eye Icon
Linxens Acquires Smartrac’s Secure ID & Transaction
Finance
07/11/2016Linxens Acquires Smartrac’s Secure ID & Transaction

Acquisition marks a transformational step in the development of Linxens Diversifies its product range in RFID antennas and inlays The new group will generate more than €500 million in revenue and employ 3,500 people worldwide

Read Full PostRead - Eye Icon
Driving Business Transformations with Essential Consulting Skills
News
04/02/2025Driving Business Transformations with Essential Consulting Skills

The harsh truth is that the initial impact had by most training courses in professional settings simply doesn’t last, with businesses soon falling back into the same old routines.

Read Full PostRead - Eye Icon
Giving Healthcare A Helping Hand
Innovation
14/01/2021Giving Healthcare A Helping Hand

Beginning life in the United Kingdom back in 1998, DC Risk Solutions was formed to provide an insurance solution for high severity, low frequency medical claims. Now, more than two decades on, the firm has released its latest product, Integrated Payor Solution

Read Full PostRead - Eye Icon
Everything You Need to Know About Virtual Data Rooms
Innovation
04/03/2022Everything You Need to Know About Virtual Data Rooms

In the current world, digital companies are becoming more prominent in the business sphere. Resulting in an increase in data management by businesses, though with the increase in data responsibility is needed for those businesses to protect and manage that dat

Read Full PostRead - Eye Icon
Guide on How to Write a Dissertation Proposal in Finance and Accounting
News
18/08/2021Guide on How to Write a Dissertation Proposal in Finance and Accounting

A dissertation proposal gives your supervisor and the department an idea of the subject you wish to discuss. It also helps you to narrow down the discussion to a few ideas, especially demonstrating an understanding of the subject you wish to discuss. Professio

Read Full PostRead - Eye Icon
Three Entrepreneurs Who Take Sustainability Seriously
Corporate Social Responsibility
15/11/2016Three Entrepreneurs Who Take Sustainability Seriously

In the past year, sustainability has been a growing topic of interest for businesses around the world. With the Paris Agreement fresh on people’s minds, environmental sustainability is no longer a thing of moral grounds, something simply to work towards in t



Our Trusted Brands

Acquisition International is a flagship brand of AI Global Media. AI Global Media is a B2B enterprise and are committed to creating engaging content allowing businesses to market their services to a larger global audience. We have 14 unique brands, each of which serves a specific industry or region. Each brand covers the latest news in its sector and publishes a digital magazine and newsletter which is read by a global audience.

Arrow