Bank of Georgia Group to acquire Ameriabank CJSC for $303.6m to expand reach

Bank of Georgia Group PLC (“BOGG”) has officially announced its plan to acquire 100% of Ameriabank CJSC, a leading Armenian bank, for approximately $303.6 million. This strategic move is poised to significantly bolster BOGG’s footprint and growth prospects in the fast-evolving and promising Armenian market. The acquisition, subject to shareholder and regulatory approvals, marks a pivotal step in BOGG’s expansion strategy, promising to deliver substantial shareholder value by leveraging the Group’s proven expertise in customer focus and digital banking capabilities.

The agreement to acquire Ameriabank comes at an attractive valuation of 0.65x net asset value as of October 31, 2023, and 2.6x P/E 2023. This cash transaction is to be fully financed by BOGG’s surplus capital, ensuring maximized shareholder returns while maintaining the strong capital ratios of JSC Bank of Georgia. The acquisition will see BOGG acquiring 90% of Ameriabank, with the remaining 10% to be retained by the European Bank for Reconstruction & Development (EBRD), pursuant to a Shareholders’ Agreement.

Ameriabank, recognized for its leadership in the Armenian banking sector, offers BOGG an attractive platform to apply its successful digitalization, payments, and customer franchise growth strategies. This acquisition is expected to be immediately earnings enhancing, funded through existing cash resources of BOGG, and is anticipated to be accretive to earnings per share (EPS) and return on average equity (RoAE), without causing dilution to existing shareholders.

Mel Carvill, Chairman of the Board of Directors of Bank of Georgia Group PLC, expressed enthusiasm about the acquisition, stating, “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.”

Archil Gachechiladze, Chief Executive Officer of BOGG, echoed Carvill’s sentiments, highlighting Ameriabank’s role as a growing, profitable entity that will serve as a foundation for further expansion and success in Armenia.

The acquisition of Ameriabank by Bank of Georgia Group PLC is a strategic move that reflects the growing trend of cross-border banking expansions aimed at capturing growth in emerging markets. This transaction is not just a testament to BOGG’s ambitious growth strategy but also highlights the attractiveness of the Armenian banking sector, which shares similar market characteristics with Georgia. With this acquisition, BOGG is set to enhance its regional influence, leveraging Ameriabank’s strong local presence and management team. The move is poised to bring about significant synergies, especially in digital banking, a domain where BOGG has already established leadership in Georgia.

The Bank of Georgia Group PLC’s acquisition of Ameriabank represents a strategic endeavor to capitalize on the growth opportunities within the Armenian market. It signifies BOGG’s commitment to extending its footprint and leveraging its banking expertise to foster growth in new markets. This acquisition is a clear indicator of the dynamic shifts within the banking sector, where strategic alignments and digital advancements are paving the way for regional and cross-border expansion.