Mega deal between Alpha Bank and Unicredit changing the landscape

The landscape changes for the Greek banking sector after the announcement of the mega deal between Alpha Bank and Unicredit. The agreement, which was announced in the wake of the Greek economy’s upgrade by S&P, officially puts Greece back on the agenda of major investment decisions and paves the way for expressions of interest from systemic investors.

These include the investors interested in acquiring a stake in the National Bank of Greece, through a process that is already underway. The Hellenic Financial Stability Fund (HFSF) welcomed the proposal, but it clarified that a tender process will be held.

The Ministry of Finance and the Bank of Greece also welcomed the development.

What does the Mega Deal involve?

The correlations in the Greek and also in the Romanian market are changing following the Alpha Bank – UniCredit mega deal.

The agreement between the two banking groups provides for the merger of subsidiaries in Romania, through which the third largest bank in the country will be created, and a commercial agreement for the distribution on the domestic market of Unit Linked products of UniCredit. For this reason the Italian group will acquire 51% of Alphalife.

However, the most critical part of this cooperation is that UniCredit submitted an offer to the Hellenic Financial Stability Fund for the 9% stake that holds in Alpha Services and Holdings.

If UniCredit does not become the preferred investor in the tender process, then the Italian bank will purchase, within 24 months, a percentage of Alpha shares corresponding to the pre-agreed amount it is going to invest. In fact, this percentage will be at least 5%. The government showed that it was aware of the agreement and welcomed it.

If the offer is accepted, it will be the first investment made by a European bank after 17 years.