March 31, 2023

DealBook: Sberbank of Russia to Buy DenizBank for $3.5 Billion

A Sberbank branch in Moscow.Andrey Rudakov/Bloomberg NewsA Sberbank branch in Moscow.

LONDON — Sberbank of Russia agreed on Friday to buy DenizBank, a Turkish subsidiary of the struggling French-Belgian lender Dexia, for $3.5 billion, as the Russian bank looks to expand into the fast-growing Turkish market.

The multibillion-dollar acquisition is the largest ever takeover by Sberbank, which is controlled by Russia’s central bank. The deal will allow the Russian bank to diversify from its domestic market into a country that has been able to grow despite its close connections to the struggling economies of Europe.

“With this acquisition, Sberbank will enter a highly attractive market, which has demonstrated exceptional growth and profitability levels in the recent years,” Sberbank’s chief exexcutive, Herman Gref, said in a statement. “Under Sberbank’s ownership, I believe DenizBank will be able to further strengthen its position in the Turkish market.”

The Russian bank and Dexia, which received a multibillion-dollar bailout from the French and Belgian governments last year, had been in discussions since mid-May over the takeover of DenizBank.

Dexia’s disposal of its Turkish operations is part of the firm’s efforts to sell assets and raise capital after receiving its bailout last year.

Sberbank’s expansion into Turkey follows similar moves into Eastern Europe earlier this year. The Russian bank acquired Volksbank International, a subsidiary of the Austrian lender Oesterreichische Volksbanken, for 505 million euros ($629 million).

The acquisition of DenizBank is expected to close by the end of the year.

Deutsche Bank, Rothschild, Troika Dialog and the law firm Linklaters advised Sberbank on the deal, while Bank of America Merrill Lynch and the law firm White Case advised Dexia.

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