Turkish bank sold to Spanish lender for $2.5 billion

Ferit Şahenk, the head of Turkish Doğuş Group, keeps presiding the board of Garanti

Spanish lender BBVA (Banco Bilbao Vizcaya Argentaria) has acquired control of Garanti Bank, one of Turkey's biggest lenders, by raising its stakes to almost 40 percent.

The acquisition, valued at around 2 billion euros ($2.5 billion) at Garanti’s current share price, would further bolster the Spanish bank’s international footprint, which has helped it weather the worst economic crisis in decades in its home country over the past five years.

Earlier on Nov. 19, it was announced that BBVA was in talks with Turkey’s Doğuş Holding to raise its stakes in Garanti by nearly 15 percent.

BBVA, which makes most of its profit outside its home market, said in March it would continue to bet strongly on Turkey even amid political uncertainty in the country at the time.

Garanti has been a bright spot for BBVA this year. The Spanish bank’s net profit for the first nine months fell 37 percent to 1.93 billion euros - however Garanti’s contribution of 235 million euros represented a rise of 20 percent.

Doğuş, whose interests range from media and restaurants to ports, has been expanding in sectors including hospitality in recent years but has so far not commented on why it would want to reduce its stake in Garanti.

BBVA said that under Turkish law it would not be forced to make a full takeover offer for Garanti, which has a market value of around $16.6 billion.

However, increasing its stake triggers a clause in its shareholders pact with Doğuş, giving it control over the 10-strong board. Each currently appoints four representatives and must agree on naming a chief executive, but the clause would allow BBVA to name seven board members.

The deal sees BBVA, which currently owns 25 percent of Garanti,...

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