The European Bank for Reconstruction and Development (EBRD) has agreed to acquire a 4.5% stake in Poland headquartered Bank BGŻ BNP Paribas for PLN430m ($106m).
EBRD stated that this transaction is taking placing in the context of the completion of the core assets acquisition of BGŻ BNP Paribas’ Raiffeisen Bank Polska announced in April this year.
Bank BGŻ BNP Paribas is the sixth largest bank in Poland and has a market share of 5% in loans and 4.5% in deposits.
The bank also operates in an agro-segment niche thanks to BGŻ’s heritage.
The investment from EBRD will support the bank with increased competitiveness as it can transforms itself to reap the benefits of economies of scale by integrating Raiffeisen Bank Polska. It will also strengthen the Polish banking sector through the consolidation in a competitive environment.
The transaction will support the plans of BNP Paribas to maintain and increase the free float of BGŻ BNP Paribas’ shares on the Warsaw Stock Exchange in accordance with BNP Paribas’ commitment to the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego).
EBRD Financial Institutions, EU Banks director Lucyna Stańczak-Wuczyńska said: “This is a landmark transaction which will strengthen and enhance competition in the Polish banking sector. Both are extremely important to provide ongoing support to Poland’s fast growing economy where the demand for finance is high.
“The EBRD is proud that with this investment we will be able to deploy our strengths and become part of BGŻ BNP Paribas’ success story.”
The transaction will include a contractual arrangement of BNP Paribas and EBRD including customary representations and warranties along with a support arrangement related to the potential future disposal of BGŻ BNP Paribas shares by the European financial institution.
EBRD stated that this arrangement is only valid for a limited period at a future date after the expected completion of free float commitment and is subject to financial and other limitations agreed between the bank and the financial institution.
There is also no put option or any other arrangements in place, to oblige BNP Paribas to acquire the EBRD’s shares in BGŻ BNP Paribas.
The EBRD has also agreed not to transfer the shares in the bank before 6th January, next year, but there is no contractual requirement to retain the shareholding beyond this date.