Bank of Georgia announces proposed acquisition of Ameriabank for  $303.6 million

ArmInfo.  Bank of Georgia Group PLC ("BOGG" or the "Group") announces the proposed acquisition  of 100 per cent. of a leading bank in Armenia, Ameriabank CJSC ("Ameriabank"), for approximately $303.6 million. This acquisition will significantly enhance the Group's presence and growth opportunities within a fast-growing and attractive market, according to BOGG's official statement.

As stated in the statement, "The Board and Management of Bank of  Georgia Group PLC are pleased to announce that conditional agreement  has been reached to acquire 100% of the total issued share capital of  Ameriabank CJSC (the "Acquisition"). BOGG believes that significant  value can be derived from capitalising on opportunities within  Armenia through this acquisition of a leading Armenian bank and by  leveraging BOGG's experience and expertise as it integrates  Ameriabank into the wider Group (the "Enlarged Group"). The  Acquisition is conditional upon the approval of the Group's  shareholders and regulatory approvals.

Key highlights:

-The Group is set to acquire Ameriabank, a leading universal bank in  Armenia, which has an attractive franchise, in an attractive market,  with similar characteristics to Georgia.

-Significant upside potential from leveraging the Group's existing  customer focus and digital/payments capabilities.

-Approximately $303.6 million cash transaction fully financed by  surplus capital of the Group at an attractive valuation; maximising  shareholder return while preserving the strong capital ratios of JSC  Bank of Georgia ("JSC BOG").  Acquisition price of 0.65x net asset  value as at 31 October 2023 and 2.6x P/E 2023.

-90% of Ameriabank will be acquired upon completion of the  Acquisition, with a 10% shareholding to be retained by the European  Bank for Reconstruction & Development ("EBRD") subject to a  Shareholders' (Put and Call Option) Agreement.

-No shareholder dilution expected for existing shareholders. The  Board and Management believe the Acquisition will be immediately EPS  and RoAE accretive, with JSC BOG maintaining a strong capital  position.  - It is intended that the BOGG Dividend and Capital  Distribution Policy for the Enlarged Group, subject to trading and  prospects being satisfactory, will remain unchanged with a target  pay-out ratio in the range of 30-50% of annual profits Mel Carvill,  Chairman of the Board of Directors of Bank of Georgia Group PLC  commented:

"This transaction is a significant milestone for the Group and a new  chapter in our strategic development. Through Ameriabank we are set  to enter Armenia, one of the fastest-growing economies in the region.  Ameriabank has a well-regarded and experienced management team, and I  am delighted that they will stay on after the transaction is closed.   The Board believes this transaction will enable the Group to  substantially increase scale and unlock additional growth  opportunities as our impressive results in digitalisation, payments  and customer franchise growth can be applied to Ameriabank's further  development. This transaction is immediately earnings enhancing,  using the Group's existing cash resources, with no dilution for  existing shareholders. The Board unanimously views it as an excellent  opportunity to create more value for our shareholders."

Archil Gachechiladze, Chief Executive Officer of Bank of Georgia  Group PLC commented:

"Today we announced the proposed conditional purchase of 100% of the  shares in a leading universal bank in Armenia.  Ameriabank is a  growing and profitable bank, that is top of mind locally, with a  strong customer franchise. We see Ameriabank as an attractive  platform to increase scale and further grow our business by  translating some of the successes that the Group has already  delivered in the Georgian market. I would like to thank Ameriabank's  team for their cooperation, and I look forward to working with them  to unlock growth opportunities in one of the best-performing  economies in the region." Following the closing of the transaction  and with Ameriabank on board, the Group also intends to change its  name, marking a new chapter in its development, with two leading  universal banks in attractive high-growth markets," the source notes.

Days earlier, Bank of Georgia Group PLC confirmed media reports  regarding a potential transaction involving Ameriabank, stating that  "it is in "advanced discussions".

"The transaction, if completed, would constitute a Class 1  transaction under the UK's FCA (Financial Conduct Authority) Listing  Rules. The Company will update shareholders on progress made with  respect to the acquisition as appropriate."

Bank of Georgia Group PLC is the first Georgian bank to be listed and  successfully quoted on the London Stock Exchange (LSE) (<Company> -  LSE: BGEO LN). The bank is included in the FTSE-250 index. Its main  division is <Bank of Georgia> JSC (<Bank of Georgia>, <BOG>), the  leader in digital banking in Georgia, which provides a range of  banking and financial services to retail customers and businesses. As  noted in the message, relying on its competitive advantages, the  Group strives to ensure sustainable high profitability and maximize  shareholder value.  <Bank of Georgia> is the country's leading bank  with a market share of 35.1% (by total assets), 33.8% (by total  loans) and 34.6% (by customer deposits). The bank offers a wide range  of services in retail banking, corporate banking and investment  management. Bank of Georgia serves over 2.5 million customer  accounts, has 271 branches, the country's largest ATM network (886),  many express payment terminals (self-service), as well as a fully  functional remote banking platform and a modern call center. The bank  has credit ratings from world rating agencies: Moody's: <Ba3/Ba 2>  (in foreign and national currency), Fitch Ratings: <BB-> (long-term  and short-term issuer default ratings); Outlook <Stable>.

The shareholders of Ameriabank as of January 1, 2024 are Imast Group  (S-Wye) Limited (previous name - Ameria Group (S-Wye) Limited) with a  share in the capital of 48.82%, EBRD - 17.71%, Asian Bank Development  (ADB) - 13.92%, ESPS Holding Limited - 12.05%, Afeyan Foundation for  Armenia Inc. - 7.5%. The Bank's assets as of this date amount to $3.5  billion, loan portfolio - $2.4 billion, investments in securities -  $380 million, total capital - $483.7 million, total liabilities - $3  billion, of which $2.2 billion are liabilities to customers.  Ameriabank completed 2023 with a net profit of $113.8 million.  Ameriabank, while maintaining its leadership in total capital, is  among the top three in other main balance sheet indicators. S&P  Global Ratings has assigned the bank a long-term issuer credit rating  of "BB-" with a Outlook <Stable>.

Ameriabank is a leading financial technology institution and a major  contributor to the Armenian economy. Being a dynamically developing  universal bank, Ameriabank provides a large package of innovative  banking services through its omni-channel distribution platform and  with clear focus on digital products and ecosystems.The Bank has  adopted a customer-focused approach to ensure service quality and  modern banking experience in an evolving digital environment.  Ameriabank is committed to doing business responsibly and advancing  Armenia's transition towards a sustainable future.