Alpha Services and Holdings SA, owner of Alpha Bank SA, and UniCredit have agreed on the main financial terms for the merger between UniCredit Bank SA and Alpha Bank Romania SA, as part of a strategic partnership at an international level, the two banks announced on Monday.

The merger will bring together two complementary entities, both UniCredit Bank Romania and Alpha Bank Romania having a solid position in the corporate and retail segments.

According to a press release from UniCredit Romania, this merger will create the third largest bank on the local market, with a combined market share of 12% in terms of total assets.

For the first time in Romania, two European banking groups are using partnership as a market consolidation approach. This new approach aims not only to better support the Romanian economy, but also to prioritize the needs of customers and the communities in which they operate.

“This is the first acquisition that UniCredit has made in 15 years, signaling the inherent potential that we, as a business, see in Romania and in the Central and Eastern Europe region. The opportunity offered by this merger is significant not only to our current customers and future, but also to the employees of both institutions. I am delighted that these two teams will come together and know that they will work more synergistically than would have been possible separately. This acquisition is a testament to UniCredit’s commitment to increasing the quality and excellence of the factories of our products, not to mention the transformation that UniCredit has gone through over the last two years. To attract a partner of this caliber and agree on a commitment like this would have been unthinkable for the old UniCredit and I am confident that it is the beginning of a success story for this bank from the Central and Eastern Europe region,” said Andrea Orcel, UniCredit Group CEO.

Completion of the transaction is expected in 2024, subject to completion of a due diligence process, obtaining corporate approvals for the merger and all necessary regulatory approvals and agreements, including competition. Upon completion, Alpha Bank is expected to own 9.9% of the share capital of the combined entity and receive a cash consideration of €300 million. The cash component remains subject to post due diligence adjustments related to asset quality, if applicable.