UniCredit Plans to Merge with Ukrsotsbank

Today UniCredit Bank announced that it has completed the process of merging its Ukrainian arm, UniCredit Bank Ukraine, and HVB Bank, where UniCredit is a major shareholder. Following completion of the acquisition of Ukrsotsbank (USCB: HOLD), UniCredit will integrate it into the new UniCredit/HVB Bank structure. Ukrsotsbank intends to focus on retail while UniCredit Bank Ukraine will focus primarily on corporate business. Alexander Viktorov: The plans look similar to when Raiffeisen bought Aval in 2005. It had also intended to merge the acquisition target with its existing Ukrainian subsidiary, but the procedure of uniting the two assets appeared to be more expensive and complicated than expected. Raiffeisen ultimately kept just Aval. We believe UniCredit has every chance to realize the merger with Ukrsotsbank since it already has experience in integrating banking assets in Ukraine and UniCredit is in a rapid expansion phase throughout Europe, making it unlikely to sell any assets. Regardless of what the Italians decide to do – merge their assets or a sell one of them, Ukrsotsbank stands to gain from the positive synergies with the global heavyweight.