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BBVA to buy stake in Turkey's Garanti for $5.8B

BBVA to buy stake in Turkey's Garanti for $5.8B

Spanish bank BBVA has agreed to acquire a 24.89 percent stake in Turkey's Garanti Bank for (EURO)4.2 billion ($5.84 billion) in cash from shareholders including the financial services division of General Electric Co.
Banco Bilbao Vizcaya Argentaria, Spain's largest after Banco Santander, said Tuesday it considers Turkey a market with major growth potential and that BBVA will issue shares to raise (EURO)5 billion in capital to finance the transaction.
BBVA will acquire the stake from the Turkish bank's two main shareholders, Dogus Holding and GE Capital, and run the bank jointly with Dogus.
Garanti Bank is Turkey's second-largest private bank in terms of assets _ (EURO)60 billion as of June 30 _ and has about 20,000 employees in 837 branch offices.
If the deal goes through, BBVA will have exactly the same stake in Garanti Bank as Dogus Holding and they will run Garanti Bank together, BBVA said.
BBVA ha agreed to acquire from Dogus a 6.29 percent stake for $2.06 billion, and it plans to buy an 18.6 percent stake from GE for $3.78 billion.
GE will retain a 2.25 percent stake and says it expects the deal to close in the first quarter of next year.
"This sale is consistent with our stated strategy of reducing the size of our financial services portfolio in a smart and timely manner and focusing on our core businesses and markets," Dmitri Stockton, GE Capital's CEO for Global Banking said in a statement.
The deal is subject to approval by Spanish, Turkish and European regulators.