ING Group said it agreed to acquire Turkey's Oyak Bank for $2.67 billion and will finance the acquisition with existing internal resources.
ING expects the transaction to result in a decrease of the group's Tier 1 ratio by approximately 50 basis points. Oyak Bank employs 5,581 workers, 1.2 milloin retail customers, 10,000 small and medium-sized business customers and a 3% share of the Turkish market, according to ING.
In 2006, it made a pretax profit of 165 million Turkish lira ($127 million) and at the end of the year, it had total assets of 11.8 billion lira ($9.05 billion) and a book value of 988 million lira.
ING said its offer will result in a price/book multiple of 3.326 of shareholder's equity at March 31 2007, and a price/earnings multiple of 26.6 times the 2006 normalised earnings. ING expects to close the transaction in the second half of 2007, subject to regulatory approval. It thinks the acquisition will be accretive to ING's earnings per share from 2008.