GE Capital, the financial services division of GE, announced today it has reached agreement to sell an 18.6% stake in Turkiye Garanti Bankasi A.S (‘Garanti Bank’) to Spanish banking group, Grupo Banco Bilbao Vizcaya Argentaria (‘BBVA’). GE will receive $3.776 billion (bn) and retain 2.25% of Garanti shares.
“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. “Garanti has been an excellent investment for GE Capital, creating tremendous value for GE shareholders. Over the past five years, we have worked closely with Garanti’s leadership team building Turkey’s best performing and most innovative bank. We have also enjoyed a successful partnership with Garanti’s lead shareholder, the Doðuþ Group, and Ferit Sahenk, who have helped us expand in other areas in the country. BBVA is a leading bank that will help Garanti to continue to grow, and we will retain a small investment for future value creation.”
With an initial $1.8bn investment in Garanti in 2005, GE Capital will realize $5.2bn in total proceeds from dividends and the sale of the Garanti holdings upon completion of this announced transaction. At the close of trading on the November 1, 2010, GE 's 2.25% holding has a market value of $588 million. This sale follows GE Capital's recently announced dispositions of other investments.
This transaction is subject to completion of BBVA’s separate acquisition of additional Garanti Bank shares from the Doðuþ Group that BBVA announced today, and all necessary regulatory approvals. It is expected to close in Q1 2011.
GE is investing in Turkey
Kursat Ozkan, GE national executive for Turkey said: “While GE Capital is reducing its stake in Garanti, GE remains fully committed to Turkey as a technology provider and as an investor. It is an attractive market with a growing economy that matches up well with the industrial products, solutions and services we provide. We plan significant investment and partnerships in areas such as infrastructure, technology, energy and healthcare.”
GE Capital was advised in the transaction by J.P. Morgan. GE Capital's external counsel were Slaughter & May and Turkish lawyers Paksoy.
About Garanti Bank
Garanti Bank is the second largest-private bank in Turkey with $78 billion in assets as of December 31, 2009. Garanti provides retail, commercial, corporate and private banking services to over eight million customers and operates 792 branches.
About GE Capital
GE Capital, the global finance unit of General Electric, offers consumers and businesses around the globe an array of financial products and services. GE (ge.com) is a diversified infrastructure, finance and media company taking on the world’s toughest challenges. For more information, visit gecapital.com or follow company news via Twitter (@GECapital). GE is Imagination at Work.
Russell Wilkerson - GE Capital, Managing Director of Communications and Public Affairs
P: +1 203 840 6420 / M: +1 203 581 2114 / E: russell.wilkerson[.]ge.com.