BBVA completed a significant milestone in its voluntary takeover of Garanti Bank by reaching an 86 percent share guarantee, as recorded with the Turkish supervisory authority at the close of the offer process. This move marks a pivotal moment in BBVA’s effort to consolidate control over its Turkish subsidiary and aligns with the bank’s long-term strategy in emerging markets.
The acquisition advanced after BBVA boosted its stake from a 49.85 percent shareholding to exceed 50 percent, a threshold that the group had not yet crossed. This advancement came through an enhanced bid price, increasing from 12.20 to 15 per Garanti share, which effectively met the objective of acquiring a controlling stake. The price adjustment was instrumental in securing the required approvals and in transforming the transaction into a full and binding takeover. The financial package associated with this bid implies a payment to BBVA of 22,757 million Turkish liras, equivalent to about 1,350 million euros, reflecting the premium that BBVA was willing to pay to achieve control. Since the operation commenced, approximately 3,220 shareholders participated, collectively controlling around 1,570 million Garanti shares. Source: BBVA disclosures and Turkish market filings.
BBVA had set out a maximum potential payment of 31,595 million Turkish liras, roughly 1,965 million euros, should all Garanti shareholders decide to sell their holdings to the bank. Under this scenario, the impact on the CET1 capital ratio was estimated at as much as 34 basis points, a consideration that underscores the balance between strategic control and capital strength. The plan reflects a disciplined approach to capital management while pursuing the strategic benefits of a larger, more integrated Turkish franchise. Source: BBVA board communications and market updates.
The Board of Directors of BBVA had approved initiating a voluntary takeover offer for the 50.15 percent stake in Garanti that remained outside BBVA’s control as of November 15, 2021. The acceptance period, however, began later, marking the start of a carefully sequenced process designed to maximize participation and minimize disruptions for Garanti’s shareholders. The initial acceptance window was scheduled for 20 working days, and by April 29, BBVA announced an extension of the mandate by two weeks, extending the period to May 18. This extension was aimed at ensuring that more shareholders could consider the offer and decide on their positions in light of evolving market dynamics and regulatory considerations. Source: BBVA board announcements and regulatory filings.
Overall, the Garanti transaction illustrates a strategic push by BBVA to deepen its footprint in Turkey, a market characterized by rapid credit growth and a dynamic banking sector. The 86 percent share guarantee reflects confidence in Garanti’s core franchise, its customer base, and the synergies that BBVA envisions from closer integration, including potential improvements in efficiency, cross-border product offerings, and enhanced capital deployment. Analysts noted that the final outcome would depend on the broader market environment, regulatory alignment, and Garanti shareholders’ willingness to participate in the offer. Source: market analyses and BBVA communications.