On Friday, Banca Transilvania announced that it acquired OTP Romania Group, in a transaction worth EUR 347.5m. This would put the transaction’s P/B at 0.64x, below the Bloomberg East Europe Banking Sector median of 1.01x.
Banca Transilvania announced on Friday that it had acquired OTP Romania Group for a total transaction price of EUR 347.5m. This came after the Bank’s Board of Directors approved on 8 February 2024 the completion of the transaction, for the acquisition of 100% of the shares of OTP Bank Romania, as well as other companies within the OTP Romania Group (including OTP Asset Management SAI SA and OTP Leasing Romania IFN SA), with the contract being signed on Friday.
Banca Transilvania noted that both it and OTP Bank Romania will act as separate entities until the completion of the transaction. They also noted that in order to integrate the above-mentioned entities into the BT Financial Group, they will initiate and implement the legal procedures necessary for obtaining all necessary approvals from the regulatory authorities.
According to the Chairman of Banca Transilvania’s Board of Directors, the acquisition of OTP Group’s business in Romania is an opportunity to strengthen its leading position and contribute to the consolidation of the Romanian banking market. They will continue pursuing their ambitious plans by organic growth but also maintain an active role in further M&A possibilities in the financial market segments of interest.
Top 10 banks’ market share in Romania, by total assets (2022*, % of the total)**
*latest available data for all banks
**Alpha Bank has been acquired by Unicredit in October 2023
Source: Romanian National Bank, InterCapital Research
The transaction price is similar to the one estimated for OTP Romania last month when the rumors of the acquisition started circulating, at EUR 350m.
P/B comparison between regional banks, Bloomberg East Europe Banking Sector*
Source: Bloomberg, Companies’ data, InterCapital Research
*P/B based on the latest available data, excluding OTP Romania which is based on the deal described above
As Banca Transilvania holds 20.8% of the total market (9M 2023, latest available data), and OTP Romania holds 2.8%, after the acquisition is complete, it would hold 23.6% of the total market. Furthermore, the transaction price puts the P/B at 0.64x, which is lower than the Bloomberg East Europe median, in turn, signaling that this is a good deal at the price for Banca Transilvania.
