TBILISI (Reuters) - Chinese conglomerate Hualing Group plans to expand in Georgia's banking sector by purchasing Societe Generale's SOGN.PA controlling stake in Bank Republic, one of the largest lenders in ex-Soviet country, Hualing said on Wednesday.
“The Chinese Xinjiang Hualing Industry and Trade (Group) Co., Ltd. (Hualing Group) entered into a preliminary agreement with the Societe Generale Group and the European Bank for Reconstruction and Development (EBRD), for the acquisition of Societe Generale’s majority stake in Bank Republic, its Georgian subsidiary,” it said in a news release.
Georgia’s banking sector is fast developing and has seen an increasing appetite from foreign investors. The transaction is a major merger and acquisition deal in Georgia’s banking sector.
The group said that the transaction would help it strengthen its banking arm in Georgia and in its business portfolio.
“According to the key transaction terms, Hualing Group would merge Bank Republic with its banking entity Basis Bank to create a universal bank that would expect to be firmly anchored as the No. 3 player in the Georgian market,” it said.
Societe Generale Group would own approximately 8 percent of the shares in the new combined entity and remain a member of the bank’s supervisory board, while the EBRD would also hold a 3.9 percent stake in the new combined entity and also remain a member of the supervisory board.
Other details of the deal are not disclosed yet and Bank Republic’s officials were not available for comments.
Societe Generale owns 93.64 percent stake in Bank Republic, while the EBRD holds 6.36 percent.
Hualing Group is one of Georgia’s largest foreign investors, operating mainly in the fields of building, managing and renting of trade centers and wholesale markets, as well as real estate, logistics, hotel construction and management, livestock husbandry and meat processing.
The Chinese conglomerate also owns a banking subsidiary in Georgia, JSC Basis Bank and other financial assets in China.
There are 19 commercial banks in Georgia including 17 foreign-controlled banks and one branch of non-resident banks.
Reporting by Margarita Antidze; Editing by Jeremy Gaunt
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