CMS Prague has advised Ceskoslovenska obchodni banka, the Czech division of KBC Group, on the acquisition of 45% stake in the Czech building savings bank Ceskomoravska stavebni sporitelna from Bausparkasse Schwabisch Hall, advised by Schoenherr.
The total value is EUR 240 million, which represents a 1.54 multiple of the 2018 standalone net book value and a 9.20 implied multiple of 2018 net profit including discounted 2024 synergies. Parties have agreed that dividends from 2018 and 2019 profits will fully belong to Ceskoslovenska obchodni banka (CSOB).
According to KCB press release, the transaction will have an impact of approximately 0.30 percentage points on the KBC Group’s CET1 ratio, which stood at 16%, at the end of 2018 and would lower KBC Group’s 2% M&A buffer to 1.70%. Furthermore, the revaluation of KBCs 55% stake in Ceskomoravska stavebni sporitelna (CMSS) will lead to a one-off gain for KBC on the date of the closing of the transaction, estimated at approximately EUR 80 million.
As a result of this transaction, CSOB will hold 100% of CMSS and become the only shareholder of the company. The agreement is still subject to anti-trust approvals and is expected to close by summer 2019.
CSOB is a universal bank in the Czech Republic, established by the State in 1964 and privatized in 1999. Since 2007 the bank is a wholly-owned subsidiary of KBC Bank. CSOB provides its services to all groups of clients, as well as SME, corporate, and institutional clients. In retail banking in the Czech Republic, CSOB is operating under brands brands CSOB and Postovni sporitelna (Postal Savings Bank; financial centers and outlets of the Czech Post network).
The CMS team was led by Partner Lukas Janicek and Counsel Patrik Przyhoda, supported by Partners Tomas Matejovsky and Libor Prokes, Associate Stepan Havranek, and Lawyers Lukas Reichmann and Jan Jezek.
Schoenherr Partner Martin Kubanek led the team in Prague.