Under the terms of agreement, BBVA will buy an additional 14.89% stake in Garanti for TRY5.5bn (€1.9bn), increasing its holding in the bank to 39.9%.
Dogus will continue to serve as a key shareholder with 10% for at least three years.
Claimed to be the top Turkish bank by market capitalization of more than €13bn with about €85bn in assets, Garanti serves 13 million customers through an extensive retail network of nearly 1,000 branches and more than 4,000 ATMs.
Employing more than 22,000 people, Garanti is also the top bank in Turkey in terms of mortgages, consumer loans, auto finance and credit cards.
BBVA chairman and chief executive officer Francisco González said: "Garanti operates in a market that has great growth potential and has a similar business model to that of BBVA, which is customer-centric and technology-based. BBVA and Garanti will continue to contribute to the growth of the economy and businesses in Turkey."
Dogus Group and Garanti chairman Ferit Sahenk said: "BBVA and Dogus are the ideal partners to prolong Garanti’s success story and to positively contribute to the development of the Turkish economy, benefiting businesses and consumers.
"Today’s agreement is a win-win for all parties involved: BBVA, Dogus and Garanti."
After completion of transaction, BBVA will appoint seven of Garanti’s ten directors, compared to four at present time.
The transaction anticipates the second phase of the original agreement under which BBVA had an option to purchase an additional 1% after March 2016.
Expected to complete in 2015, the acquisition of additional stake would lift the BBVA Group’s profit by more than €250m in 2016, based on analysts’ consensus for Garanti’s earnings.
Image: The latest acquisition increases BBVA’s total holding in Garanti to 39.9%. Photo: Zarateman.
