Emirati bank FAB in advanced talks to buy Turkey's Yapi Kredi, sources say (updated)
21/05/2024 08:54
(Adds share moves, details, background)
By Ebru Tuncay, Birsen Altayli and Jonathan Spicer
ISTANBUL, May 21 (Reuters) - First Abu Dhabi Bank (FAB)
FAB.AD is in advanced talks to acquire Turkish conglomerate
Koc Group's KCHOL.IS 61.2% stake in Istanbul-based lender Yapi
Kredi YKBNK.IS for about $8 billion, according to three
sources close to the matter.
Final details of the potential deal for Turkey's
fourth-biggest private bank are being hammered out after several
months of negotiations, the sources said on condition of
anonymity because the talks are confidential.
Shares in Yapi Kredi rose as much as 6.7% in Istanbul
after the news emerged, while Koc Holding was up 3.7%. FAB
shares were flat.
One of the sources said that Turkish conglomerate Koc had
sought about $8.5 billion for its shares in Yapi Kredi and that
FAB had offered about $7.5 billion.
FAB, the United Arab Emirates' largest bank by assets, and
Koc Group declined to comment.
Koc Financial Services owns 40.95% of Yapi Kredi, while
Koc Holding owns 20.22%.
The bank has a market value of around $9 billion, up
from about $7.5 billion early last month. A second source said
the estimated sale value would value the entire bank at between
$13 billion to $14 billion.
Any deal would mark the latest Gulf
investment
in Turkey, whose President Tayyip Erdogan has worked in
recent years to mend ties with the UAE and Saudi Arabia and
court their funding to bolster Turkey's sputtering economy and
depleted reserves.
Ties between the regional powers had been strained by
ideological differences which saw them back opposing sides
across the Middle East and North Africa in the last decade.
But last year, the UAE and Turkey signed a free trade
agreement and then said they agreed a series of deals worth more
than
$50 billion
after Erdogan's visit to the region in July.
Turkey's economy and its banks are on a sounder footing
after a dramatic U-turn toward more orthodox policies since last
summer, including aggressive interest rate hikes that helped
rebuild some foreign reserves.
It was unclear whether FAB and Koc would ultimately
reach a final deal, which could depend in part on Yapi Kredi's
second-quarter financial results, set to be announced next
month.
FAB and other Gulf banks have benefited as regional
governments boost investment and diversify economies away from
oil revenues. Last year, the Emirati lender said it had briefly
considered bidding for London-listed Standard Chartered.
After Bloomberg reported in April that FAB was studying
potential targets in Turkey including Yapi Kredi, Koc said in a
statement to the stock exchange regarding the report that there
was no development that required a public disclosure.
In 2022, Italian bank UniCredit completed the sale to
Koc of its remaining 18% stake in 80-year old Yapi Kredi
(Reporting by Ebru Tuncay, Birsen Altayli and Jonathan Spicer
Additional reporting by Anousha Sakoui in London and Hadeel Al
Sayegh in Dubai
Editing by Daren Butler, David Goodman, Peter Graff)
((jonathan.spicer@reuters.com;))