Austrian bank BAWAG to acquire PTSB for €1.6bn

Austrian bank BAWAG has won the race to acquire PTSB in an all cash transaction valued at just over €1.6bn, it has been announced.

Last month, BAWAG said it had submitted a non-binding proposal to acquire PTSB as part of a sales process launched last October. Under the Recommended Cash Offer, which has been unanimously recommended by the PTSB Board, BAWAG will acquire the entire issued share capital of PTSB.

The State still owns a majority 57.5% share in PTSB.

The purchase price is for €2.97 per share, a 26% premium on the bank's share price, resulting in an overall price tag of €1.6bn. The State is expected to receive around €931m from the sale of proceeds for the State.

The announcement was welcomed by finance minister Simon Harris.

Chair of PTSB Julie O’Neill said the announcement comes “following a robust and competitive formal sale process” and “we are confident BAWAG brings the long-term ambition, capability and capital to accelerate PTSB’s growth and strengthen competition for customers in the Irish market”.

“This Acquisition has the potential to deliver significant benefits for customers, combining BAWAG’s scale and expertise with PTSB’s deep roots in Irish communities to deliver an even stronger customer experience through greater choice, improved service and continued innovation.” 

Chief executive of BAWAG Anas Abuzaakouk said Ireland represents a very attractive market for the company “underpinned by a strong macroeconomic backdrop, a robust banking sector, and solid long-term fundamentals”.

“Building on our presence in Ireland since 2015 and the establishment of our retail business with MoCo in 2023, the proposed acquisition represents a highly strategic opportunity to strengthen our competitive positioning by bringing together PTSB’s local market expertise and commitment to community banking with the balance sheet strength, scale, and operational capabilities of BAWAG Group,” he said.

The proceeds from this transaction will be held within the Exchequer while Mr Harris examines how best to use them for the benefit of the State.

Mr Harris said this announcement “represents the most significant development in the Irish retail banking market in over a decade”.

“PTSB has made great progress in building a strong competitive franchise in the market and BAWAG’s demonstrated deep knowledge of the European and Irish banking sector can propel PTSB to an even more competitive position in the market, with the benefits of this to be seen by Irish consumers, businesses and the Irish economy more generally.” 

“Through a combination of fees, dividend income, the bank levy and disposal proceeds the State has recovered circa €4.0bn from its investment in PTSB,” Mr Harris added.