Citigroup and Akbank today announced that, following receipt of all required regulatory approvals, the parties have successfully completed the acquisition by Citigroup of a 20% stake in Akbank. Under the terms of their agreement announced on October 17, 2006, Citigroup has acquired a 20% equity stake in Akbank for approximately $3.1 billion, at a price of 9.50 Yeni Kurus (YKr) per share.
Citigroup obtained its shares in Akbank through (a) the purchase of shares equal to approximately 11.67% of the fully diluted capital of Akbank from Sabanci family members and Sabanci Holding subsidiaries at 9.50 YKr per share and (b) the issuance of new Akbank shares, equal to 8.33% of Akbank's fully paid up capital, at the same price through a reserved capital increase in favor of Citigroup. The parties' rights of first refusal or first offer under the agreements become effective at the closing.
In addition, pursuant to the terms of their agreement, Citigroup's nominee, Sir Winfried Bischoff, has been appointed to Akbank's Board of Directors, and Mr. Ege Çağlar, Sabanci Holding's nominee, has been appointed to the Board of Directors of Citigroup's Turkish banking subsidiary, Citibank A.S.
The agreement establishes a strategic collaboration between Citigroup and Akbank to pursue new commercial activities, referral arrangements and to share expertise and technology. Through its strategic investment Citigroup offers Akbank access to Citigroup's know-how in world-class product innovation, most advanced credit risk management practices and top quality management training programs, which are expected to strengthen Akbank's performance and accelerate its growth in both retail corporate and investment banking business lines.
With its widely recognized strong brand name, Akbank currently has 675 branches and 1,617 ATMs and is a premier, full-service retail, commercial, corporate and private bank in Turkey, with assets of $39.6 billion, loans of $19.6 billion and a deposit base of $25.0 billion. It is the third largest bank by assets and the most profitable private banking institution in the country.
Sir Winfried Bischoff
Sir Winfried Bischoff, is the Chairman of Citigroup Europe and a Member of the Citigroup Management and Operating Committees.
Sir Winfried Bischoff joined the Company Finance Division of J. Henry Schroder & Co. Limited, London, in 1966. In 1971, he was appointed Managing Director of Schroders Asia Limited, Hong Kong. He returned to London in January 1983 and was appointed Chairman of J. Henry Schroder & Co. in October 1983 and Group Chief Executive of Schroders plc in December 1984. Sir Win was appointed Chairman of Schroders plc in May 1995. Following the acquisition of Schroders' investment banking business by Salomon Smith Barney, Inc., a subsidiary of Citigroup Inc., he assumed his present position in May 2000.
Ege Çağlar
Mr. Ege Çağlar joined Akbank as Foreign Transactions Manager in 2002. Mr. Çağlar is currently Head, Branch Operations, Akbank a position he has held since May 2003.
About Citigroup:
Citigroup (NYSE: C), the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Major brand names under Citigroup's trademark red umbrella include Citibank, CitiFinancial, Primerica, Smith Barney and Banamex. Additional information may be found at www.citigroup.com
About Akbank:
Akbank is Turkey's most profitable private bank. Founded in 1948, Akbank offers a wide range of retail, commercial, corporate, private banking, international trade finance and capital markets services. Akbank operates through its Head Office in Istanbul and its 13 Regional Directorates, and a strong and extensive distribution network that includes 675 branches and through its alternative delivery channels. Customer-focused banking is Akbank's priority and offering customers creative, innovative, highly specialized quality products and services is the main objective of Akbank's mission.
