Erste Bank offered 3.75bn euros for 61.88% in Banca Comerciala Romana (7.65 euros/share), which makes this sum the highest ever committed in a privatisation in Romania.
The price was the only selection criterion in the final stage, and the money will be placed in an escrow account opened with the London-based bank chosen by the Romanian state.
"We got the improved bids tonight. At the end of a process that was not easy at all, BCR goes to Erste Bank. The price offered per share is 7.65 euros," Finance Minister Sebastian Vladescu said. "The price offered for BCR shows Romania is part of the European Union. It is a European price for a European bank. The Romanian assets have a European value, a global value," he added. The shares will be paid for in no more than ninety days from the signing of the contract, during which period the Romanian party has to meet a series of requirements, such as the enactment by Parliament of the Government Ordinance on the privatisation contract.
BCR is the largest bank in Romania, with almost 9bn euros in assets.
Erste Bank will take over 61.88%, of which 36.88% are held by the State Assets Resolution Authority (AVAS), and the remaining 25% plus two shares are held by the European Bank for Reconstruction and Development and the International Finance Corporation.
The selection of the winner was done after a first round during which seven other well-known international banks participated, such as Deutsche Bank, BNP Paribas, Banca Intesa and KBC.
The finalists, Erste Bank and Millennium were announced on October 26, while negotiations to draft the privatisation contract started a week later. The final draft of the document was endorsed by the Government during its meeting on December 11 and sent to the two participants the next day.
The privatisation contract will be signed today in the presence of Prime Minister Calin Popescu-Tariceanu.
"This result is truly spectacular, as it means that the bank''''''''s total value amounts to six billion euros. This is by far the largest privatisation. (...) This privatisation will help increase the banks'''''''' capacities, to support the economy. The most important thing is that the budget will have a huge sum available to spend on the road infrastructure development projects, health, schools and universities," said Premier Calin Popescu Tariceanu.
"The privatisation is but one step. The banking system will be faced with new options and challenges. We will be dealing with banks from all over Europe and we need to be prepared to cope with a very strong competition after accession. To BCR and Romania, the privatisation means stable access to additional funds at low prices," stated Radu Gratian Ghetea, the chairman of the Romanian Association of Banks.
"We are proving that Romania is part of the united European Union," Finance Minister Sebastian Vladescu stated.
Rasvan Radu, UniCredit Romania president in his turn said, "A very expensive price was paid indeed and it''''''''s obvious that the deal is very lucrative for the state. Compared with its net asset value, BCR is among the most expensive banks sold. The privatisation of BCR and the sale of HVB/Tiriac/UniCredit will change the Romanian banking system landscape next year. At such a high price paid, Erste will fight to be very competitive."
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