UniCredito and HVB exit the race for BCR

While in the middle of a merger process, the Italian banking group UniCredito and its German partner, HVB, have decided to withdraw from the privatisation of BCR, banking sources confirmed on Tuesday.

“This was clearly foreseeable considering the integration going on between the two groups,” official sources say.

Yesterday, one day before the deadline for submitting letters of intent, the two banks were to announce publicly their withdrawal from the race and give their reasons for the decision.

UniCredito and HVB were among the international banking giants that expressed an interest in what is Romania”s largest bank back in the spring. At the time, however, there was no sign of a takeover of HVB by the Italian group – an event that changed initial calculations due to the financial and logistical involvement needed in such a process. The situation is all the more complicated since HVB must meanwhile accomplish integration with Banca Tiriac, with which it recently signed a merger contract.

The unification of operations for the resulting merged bank with those of UniCredito will lead to the creation of the fourth bank on the Romanian market with total assets of almost 2.5 billion euros and a network of 108 branches. As a result, BCR is losing an important potential buyer that could have offered it integration into the largest retail network in Central and Eastern Europe.

Still, the list of potential buyers was joined recently by other major players, including Citigroup (which is considering a joint bid with US investment fund Texas Pacific), Millenium BCP (Portugal”s largest bank), Credit Agricole (France) and Dexia (France-Belgium).