Subject to fulfilment of other conditions for completion of the transaction, the transaction is expected to be completed by the end of 2020.

NLB Group announced yesterday that they have obtained the required regulatory approvals contemplated by the SPA in relation to the acquisition of Komercijalna Banka. Subject to fulfilment of other conditions for completion of the transaction, the transaction is expected to be completed by the end of 2020.

As a reminder, in late February NLB announced that they have entered into a share purchase agreement with the Republic of Serbia for the acquisition of an 83.23% ordinary shareholding in Komercijalna Banka.

NLB acquired the 83.23% shareholding for the amount of EUR 387m, which will be payable in cash on completion. Such a price puts the transaction multiple at P/B 0.77 and P/E 6, while it implies a valuation of EUR 465m for the 100% stake in Komercijalna Banka. Note that in accordance with Serbian bank privatisation regulations, NLB is not required to launch a mandatory tender offer for minorities’ shareholdings in Komercijalna Banka.

Following the completion of the acquisition, Serbia would become NLB’s second largest market accounting for roughly 24% of the Group’s assets (compared to current 4%). Meanwhile, the Group’s assets in core foreign markets would increase from 34% to roughly 49%.

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