UniCredit and HVB announce that UniCredit's Board of Directors and HVB's Management and Supervisory Board approved the combination of HVB and UniCredit. The Board of Directors of UniCredit and the Management Board of HVB, with the consent of HVB's Supervisory Baord, resolved to enter into a Business Combination Agreement (BCA) setting out the terms of such combination.
Transaction Rationale
The combination will create a New Force in European banking with:
- Customer base in excess of 28 million; over 7,000 banking branches in 19 countries and total assets of 733 billion
- Leading positions in multiple neighbouring home markets (Italy, Germany and Austria) with a unique presence in Bavaria, Austria and Northern Italy, which represent one of the wealthiest regions in Europe
- Undisputed leadership in CEE by total assets and number of branches
- Balanced and diversified business portfolio
Commenting on the transaction Alessandro Profumo, UniCredit CEO said: "Together UniCredit and HVB will be a strong new force rooted at the heart of Europe with three neighbouring home markets straddling one of continent's most prosperous regions. We will become the first truly European bank combining our strengths to deliver enhanced service and innovation to our customers and increased value to our shareholders".
Commenting on the Transaction Dieter Rampl, HVB CEO said: "With this transaction, UniCredit and HVB are at the forefront of the European banking consolidation, which has enabled both of us to choose the best partner. We are creating new growth prospects for our shareholders, customers and employees, that none of us would have been able to achieve on a stand-alone basis. Germany will continue to play an important role in this first transaction of such magnitude in Europe".
The combined entity (the "Group") will have the following strategic goals:
- Further strengthen its competitive position in its markets of presence
- Maintain and leverage on its leading position in CEE
- Optimise and consolidate operations in CEE markets, including leverage of joint branding
- Exploit complementary strengths and critical mass in scale-driven business areas such as asset management and investment banking
- Focus on growth in selected regions and business areas
- Maximise revenue and cost synergies through sharing of best practices, optimisation of production capabilities and rationalisation of overlapping or duplicated functions
Details of the Transaction
The Transaction will consist of three voluntary share-for-share offers by UniCredit for HVB, Bank Austria and BPH which will have to be approved by the competent local authorities (the "Tender Offers"). The offers for Bank Austria and BPH will also comprise a cash alternative.
The HVB offer will be based on an exchange ratio of 5 new UniCredit ordinary shares for each HVB share. The exchange ratio implies a premium of 16.9% over HVB's 3-month average closing price on 10 June 2005, or 10.4% over HVB's closing price on 25 May 2005 (the day before the start of significant media speculation), implying, based on UniCredit closing price on 10 June 2005, an aggregate consideration of 15.4 billion for 100% of HVB's share capital.
The Bank Austria offer will be based on an exchange ratio of 19.92 new UniCredit ordinary shares for each Bank Austria share. The exchange ratio implies a premium of 16.9% over Bank Austria's 3-month average closing price on 10 June 2005, or 12.1% over Bank Austria's closing price on 25 May 2005.
The BPH share offer will be based on an exchange ratio of 33.13 new UniCredit ordinary shares for each BPH share. The exchange ratio implies a premium of 16.9% over BPH's 6- month average closing price on 10 June 2005, or 21.6% over BPH's closing price on 25 May 2005.
HVB has agreed not to tender its 77.5% stake in Bank Austria in the Bank Austria offer and will use its best efforts to ensure that Bank Austria does not tender its 71.2% stake in BPH in the BPH offer.
The exchange ratios wo
