Author: Rupert Wright
Austria has always prided itself on being the doorway to central Europe, dating back to the days of the former Soviet Union. Its bankers were able to structure deals in the region using a variety of techniques including countertrade and forfaiting. If you wanted to exchange old computer parts for Zetor tractors or tins of bottled fruit, you went through Vienna.
Now Germany’s second biggest bank, HypoVereinsbank, is storming through the doorway and buying Austria’s biggest banking group. Surprisingly, the purchase of Bank Austria for e7.8 billion has been greeted with widespread equanimity – perhaps because Austrians are pleased that at least somebody in Europe is prepared to do business with them or, more likely, a reflection on the 34% premium on the share price that the German bank is prepared to pay. Either way, the deal is a coup for HypoVereinsbank, provided it can prove that it is not paying too much for its new acquisition.
HypoVereinsbank, formed less than three years ago by the merger of Munich’s two largest banks – Bayerische Vereinsbank and Bayerische Hypotheken- und Wechsel-Bank – badly needed a deal of this order to restore its status among investors.