02 August, 2009

Austria Bank Mergers & Acquisitions (Bank Austria Creditanstalt)

Photo: Bank Austria Creditanstalt's office building on Lasallestraße in Wien/Vienna.
Photo source: Bank Austria Creditanstalt AG

Bank Austria Creditanstalt AG (a subsidiary of Italy's UniCredit SpA)

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Bank Austria Creditanstalt was taken over by Germany's Hypovereinsbank (HVB Group) in 2000, which in turn was acquired by Italy's UniCredit (the then UniCredito Italiano) in 2005.

MA&D (mergers, acquisitions and dispositions) activities undertaken by Bank Austria Creditanstalt after 2005 will be listed under the UniCredit page.

Österreichische Länderbank AG

In 1880, French banking concern Société de l'Union Générale established an Austrian subsidiary named k.k. privilegierte Österreichische Länderbank. Merely two years later, Union Générale went under during an economic recession and stock market collapse, k.k. privilegierte Österreichische Länderbank was spun off from Union Générale to become locally owned. In the same year, a branch was opened in Paris. In 1894, Länderbank opened a branch in Prague, commencing its long history in the Central and Eastern European (CEE) market.

Zentralsparkasse und Kommerzialbank

In 1907, the municipal council of Vienna passed a resolution to establish a savings bank called Zentralsparkasse der Gemeinde Wien (The Vienna Community Central Savings Chest). It grew to become Austria's largest savings bank. In 1979, its name was changed to Zentralsparkasse und Kommerzialbank (Central Savings Chest and Commercial Bank). The bank was commonly known as the Z-Bank.

Creditanstalt AG

In 1855, the Rothschild family, famous for their pan-European private-banking empire, joined forces with the Habsburg Monarchy's leading aristocratic families to establish the k.k. privilegierte Österreichische Credit-Anstalt für Handel und Gewerbe (the Austrian Credit Institution for Commerce and Trade). Its focus was to provide industrial finance and securities business.

By 1918, Österreichische Credit-Anstalt für Handel und Gewerbe had already established 18 offices in what is today's Czech Republic, Slovenia, Croatia, Russia and Italy.

In 1931, ever-increasing loan losses at the bank caused by years of poor lending practice and the break-up of the Austro-Hungarian Empire after World War I led to a withdrawal of deposits and credit from Credit-Anstalt by international banks. The bank collapsed in May 1931 and the Austrian government stepped in to guarantee the bank's deposits and credit, but the required guarantees were so massive that foreign investors started to question the creditworthiness of Austria itself. Soon, the domino effects spread to Central Europe and Germany, setting off a collapse of confidence all over Europe and the economic depression of the 1930s. Credit-Anstalt was eventually resurrected by the Austrian central bank and foreign investors. In 1934, Credit-Anstalt merged with Wiener Bankverein to become Österreichische Creditanstalt-Wiener Bankverein (Austrian Credit Institution-Viennese Bank). In 1938, a branch was opened in Budapest.

In 1938, Germany under the Hitler regime made a bloodless, unopposed invasion of Austria, known as the Anschluss. When World War II officially began in 1939, Creditanstalt became part of Germany's Deutsche Bank and changed its name to Creditanstalt-Bankverein. After Nazi Germany was defeated, Deutsche Bank relinquished all of its international operations and indeed Deutsche Bank itself was broken up in pieces. In 1946, Creditanstalt was nationalized by the Austrian government.

In 1980, Creditanstalt became the first Austrian bank to open a branch in London. In 1989, Creditanstalt, along with Germany’s Bayerische Vereinsbank, three Soviet and three Western banks, established the International Moscow Bank. In 1991, Creditanstalt established Creditanstalt S.A. in Poland, becoming Poland's first foreign bank.

Recent transaction(s):

  • In 1991, Österreichische Länderbank and Zentralsparkasse und Kommerzialbank (Z-Bank) merged to form Bank Austria AG. Österreichische Länderbank specialised in corporate finance and securities dealing and had 139 domestic branches and 23 foreign offices. Z-Bank specialised in personal banking and had 219 domestic branches and 7 overseas offices.
  • In 1997, Bank Austria acquired the Austrian government's 70% stake in Creditanstalt AG for ATS 17.2-billion (Austrian schillings, USD $1.5-billion). As part of the agreement, Bank Austria must keep Creditanstalt independent for five years and guarantee jobs for its 9,800 employees.
  • In 1997, Bank Austria acquired a stake in Poland's No. 3 bank PBK.
  • In 1998, Bank Austria took full control of Creditanstalt and changed its name to Bank Austria Creditanstalt AG (often known as BA-CA).
  • In 2000, Germany's Bayerische Hypo- und Vereinsbank AG (HypoVereinsbank, later renamed HVB Group) took over Bank Austria Creditanstalt for Eur 7.8-billion (USD $7.3-billion). Bank Austria Creditanstalt became HypoVereinsbank's Central and Eastern European (CEE) market platform. Bank Austria Creditanstalt had 280 branches in Austria and more than 400 branches in Central and Eastern Europe.
  • In 2000, BA-CA increased its stake in Poland's PBK to a majority.
  • In 2001, HypoVereinsbank transferred its own CEE operations to BA-CA.
  • In 2002, BA-CA acquired 62.6% of Croatia's Splitska Banka from UniCredito Italiano for Eur 94-million.
  • Also in 2002, BA-CA acquired Biochim in Bulgaria.
  • In 2003, HypoVereinsbank spun off a 22.5% stake in Bank Austria Creditanstalt and floated the Austrian bank's shares on the Vienna and Warsaw stock exchanges, marking the first ever foreign company to be listed on the Polish stock exchange. HypoVereinsbank raised Eur 958-million from the Bank Austria Creditanstalt IPO.
  • In 2005, UniCredito Italiano SpA bought Bank Austria Creditanstalt's 77.5% owner HVB Group for Euro 15.4 billion (USD $19.4-billion). In addition, UniCredit also made an offer to buy out the 22.5% of Bank Austria Creditanstalt held by the public for Eur 2.63-billion, as well as the 29% of Poland's Bank BPH PBK held by the public for about Eur 1.48-billion. The three offers totalled about Eur 19.5-billion (USD $24.5-billion). HVB Group already held 71% of Bank BPH PBK.
  • Subsequently, however, the Polish banking regulator denied UniCredit's bid to privatise Bank BPH PBK for Eur 1.55-billion. UniCredito Italiano withdrew its offer for Bank BPH PBK in early 2006, but still indirectly held 71% of the Polish bank through its acquisition of Germany's HVB Group.
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