Sberbank agrees to pay 585 million euros for VBI: sources

Activists pass by Sberbank ATM machines at the summer camp of the pro-Kremlin youth group ''Nashi'' at lake Seliger, some 400km (248 miles) north of Moscow, August 1, 2011.

MOSCOW/VIENNA (Reuters) - Sberbank SBER03.MM has agreed to buy VBI, the eastern European arm of Austrian lender Oesterreichische Volksbanken (OTVVp.VI), for 585 million euros ($850.3 million), sources close to the transaction told Reuters.

The price is at the low end of a range that was drawn up in a preliminary accord struck in July.

"The binding agreement was signed. Now it must be approved by VBI's shareholders," one source close to the deal said.

Volksbanken has a 51 percent stake in VBI, while France's Banque Populaire Caisse d'Epargne and Germany's DZ Bank/WGZ Bank each own 24.5 percent.

Sberbank and Volksbanken declined to comment.

Sberbank's acquisition of VBI aims to secure a platform for Russia's largest bank to expand into Europe.

It would help Volksbanken -- which failed a European bank stress test in July -- to shore up its balance sheet as it seeks to repay state aid it got from the Austrian government during the financial crisis.

The Vienna-based lender said last week it was unlikely to pay a 2011 dividend, raising prospects it could be the third Austrian bank to be nationalized.

The VBI deal would be Sberbank's second purchase this year after its $1 billion takeover of brokerage Troika Dialog.

The purchase will open the door to Sberbank's expansion outside the former Soviet Union as it prepares to earn around 5 percent of net profit from international operations by 2014.

Sberbank, whose assets of more than $310 billion account for a third of the Russian banking system, also operates in Kazakhstan, Belarus and Ukraine. It has said it is also interested in entering Turkey and Poland.

($1 = 0.688 Euros)

(Reporting by Oksana Kobzeva in Moscow, Alexander Huebner in Frankfurt, and Angelika Gruber and Michael Shields in Vienna; Editing by David Holmes)