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BA-CA to acquire Russian IMB

  • BA-CA will also receive operating units in Estonia, Latvia and Lithuania
  • HVB passes a resolution on the transfer of BA-CA shares to UniCredit

Bank Austria Creditanstalt (BA-CA) will take over the majority interest in International Moscow Bank (IMB). With total assets of about US$ 7.7 billion, IMB is the ninth-largest Russian bank. Today the Management Board of HVB has stated that the actions brought by minority shareholders to contest the transaction do not contradict the transaction, and thus the last Group-internal condition for the closing has been met. The Management Board of HVB has today also passed a resolution to transfer the operating units in Estonia, Latvia and Lithuania. As announced previously, a resolution was passed to transfer to UniCredit the BA-CA shares held by HVB.

The International Moscow Bank transaction:
Subject to approval by the local supervisory authorities, HVB will sell its interest of 70.26 per cent in International Moscow Bank (IMB) plus options on another 4.81 per cent in IMB to BA-CA in cash for a price totalling € 1,015 million. A few days ago, BA-CA took over the 19.77 per cent interest in IMB held by VTB Bank France. Following the acquisition of the shareholdings held by VTB France and HVB, BA-CA will hold 90.03 per cent of IMB’s total share capital, which corresponds to 95.19 per cent of IMB’s voting capital.

About IMB
International Moscow Bank was established in October 1989; it was the first international bank in Russia, with registration number 1. Creditanstalt was one of IMB's founders. Originally specializing in corporate banking, IMB has started to expand its activities to include retail banking. The bank has achieved strong growth over the past few years: in 2005, measured by total assets, the Russian banking market as a whole grew by 33 per cent while IMB's total assets increased by 53 per cent. At present IMB is the ninth-largest bank in Russia, with total assets of US$ 7.7 billion (as at 30 September 2006). The bank currently employs some 1,800 staff and operates 45 branches, although IMB expects to significantly expand its distribution network in the medium term.

About Russia
With some 143 million inhabitants, Russia is the largest market in Central and Eastern Europe. In the years 2001 to 2005, Russia achieved real cumulative GDP growth of almost 35 per cent, making it one of the most dynamic markets worldwide. Russia's GDP is expected to grow by an average 6 per cent annually in the coming years.

The transaction comprising HVB operating units in Estonia, Latvia and Lithuania:
HVB will sell its 100 per cent interest in HVB Bank Latvia to BA-CA for a price of € 35 million in cash plus the capital increase of about € 40 million at HVB Bank Latvia subscribed by HVB in August 2006. The assets and liabilities of HVB's branches in Estonia and Lithuania will be sold to HVB Bank Latvia for a price of one and nine million euros, respectively, plus the difference between the book value of the assets transferred and the liabilities assumed.

As a result, BA-CA will be represented in the three Baltic countries with a total of four operating units located in Tallinn, Riga and Vilnius, where about 150 employees serve some 1,000 corporate customers.

The transaction comprising the sale of BA-CA shares to UniCredit:
HVB will sell to UniCredit its 77.53 per cent interest in BA-CA against payment of
€ 109.81 per share, corresponding to a purchase price totalling about € 12.5 billion in cash. At present UniCredit holds a direct interest of 17.45 per cent in BA-CA. Following completion of the transaction, UniCredit will hold about 95 per cent of BA-CA's share capital. 7.4 million shares or five per cent are free float.

Prerequisites for implementation were the issue of official authorizations and a resolution of the Management Board in each case based on a legal opinion of an external consultant confirming that the underlying resolutions at the Meeting of Shareholders on October 25, 2006 contain no error which would prevent implementation of the agreements. Today the Management Board decided on the basis of a legal opinion from the attorneys Gleiss Lutz and with regard to the valuation on the basis of a supplementary opinion from PwC on the execution.

At the Extraordinary Meeting of Shareholders on October 25, 2006, HVB submitted the agreements for the transfer of BA-CA to UniCredit, the subsidiaries IMB and HVB Bank Latvia to BA-CA and the assets and liabilities of HVB branch offices in Estonia and Lithuania to HVB Bank Latvia for approval. The Meeting of Shareholders approved the agreements with over 99.4% of the votes cast. Shareholders have instituted legal proceedings against these resolutions; 43 statements of claim have been served.

The sale of BA-CA to UniCredit and the sale of HVB Bank Latvia to BA-CA have already been officially authorized. The official authorizations for implementation of the other sales have not yet been received. They are expected in the near future.

About Bank Austria Creditanstalt and UniCredit Group

Bank Austria Creditanstalt (BA-CA) is the leading Austrian bank. Within UniCredit Group, BA-CA is responsible for commercial banking in Central and Eastern Europe. The Group operates the largest international banking network in Central and Eastern Europe with over 3,000 branches. It has more than 60,000 employees looking after some 24 million clients.

With a current market capitalization of approximately €70 billion, ranking among the top financial groups in Europe, UniCredit has a presence in 20 countries worldwide, with over 35 million clients and 7,000 branches, approximately 142 thousand employees and total assets of approximately €822 billion as of 30 September 2006.

Requests: Bank Austria Creditanstalt
Peter N. Thier, Tel. +43 (0)50505 52371, E-Mail: peter.thier@ba-ca.com