M&A; Activity Around The Globe: Alpha Bank, Eurobank, BAC, China Construction Bank Corp., AUQ, Northgate Minerals
Monday, August 29, 2021 11:14 AM

As the US stocks trade higher on Monday after data show Americans spending more freely than expected last month and as the East Coast storm caused less havoc in the Northeast, several M&A activities took place around the world. Some notable M&A activities are discussed here.

Alpha Bank and Eurobank of Greece to Merge

Two of the Greece’s biggest lenders, Alpha Bank and Eurobank, said Monday that they plan to merge, in a move to increase confidence in the country’s beleaguered economy. The deal will create a company that will rank within the "top 25 largest Eurozone banking groups with pro forma total assets of €146 billion ($212 billion) and will have the appropriate critical mass to establish it as a reference stock in the capital markets," according to a statement issued by Alpha Bank, which is swapping 5 newly issued ordinary shares for every 7 Eurobank ordinary shares. Alpha Bank said the combined entity will be a leader in all major banking segments in Greece, and estimated it had pre-provision income of €2.6 billion in 2010 on a pro forma basis. Overall, the merged bank will operate more than 1,300 branches in 8 countries in Southeastern Europe, Alpha Bank said, with a top 3 position in Bulgaria, Cyprus, Romania and Serbia. By this merger, the banks are also looking to strengthen the capital position of the combined bank and gain necessary heft to weather the crisis. The deal will help bolster the combined bank’s overall capital position, by eventually increasing its buffer to 14 percent.

Bank of America to Sell 13.1 Billion Shares of CCB

Bank of America Corporation (NYSE: BAC) said today that it has agreed to sell approximately 13.1 billion common shares of China Construction Bank Corporation (CCB) in a private transaction with a group of investors. The sale is expected to generate approximately $8.3 billion in cash proceeds and an after-tax gain on sale of approximately $3.3 billion. The transaction is expected to close in the third quarter of 2011, and is subject to customary closing conditions. Following closing, Bank of America will hold approximately 5 percent of CCB. “Our partnership with China Construction Bank has been mutually beneficial,” said Bank of America Chief Executive Officer Brian Moynihan. Bank of America and China Construction Bank are discussing a potential expansion and extension of the existing strategic assistance agreement. The sale of CCB shares announced today would put Bank of America’s ownership in CCB below 10 percent and would remove the significant investment in financial institutions deduction from the company’s Tier 1 common capital under Basel III associated with this CCB stake. BAC was trading higher by 4.57 percent to $8.10 on Monday.

AuRico Offers to Buy Northgate for $1.48 Billion

Canadian gold miner AuRico Gold Inc. (NYSE: AUQ) said that it has agreed to acquire its peer Northgate Minerals for $1.48 billion to to create a new leading intermediate gold producer. The new company will have 5 operating gold mines, a sixth mine targeting production in 2012 and 3 gold development projects in Mexico, Canada, and Australia, three of the top global mining jurisdictions. Under the terms of the Agreement, AuRico will acquire all of the issued and outstanding common shares of Northgate on the basis of 0.365 AuRico common shares per Northgate common share. The offer represents a 45 percent premium on Northgate’s closing price on August 26, 2011. The acquisition of Northgate by AuRico will be completed by way of a court approved plan of arrangement. The Agreement has been unanimously approved by the boards of directors of AuRico and Northgate. The combination of the two will immediately position the combined company as a pre-eminent intermediate gold producer with peer leading growth. AUQ is trading lower by 11.93 percent to $12.26, after the announcement.