Turkey’s competition authority approves Emirates NBD taking over Denizbank

Turkey’s competition authority on Wednesday gave approval to Emirates NBD Bank to take over Denizbank, Turkey’s fifth largest private bank in terms of size of assets, A Haber reported.

According to the deal between the two banks, NBD will take over 11 subsidiaries of Denizbank. 

Emirates NBD announced last year that it had entered into a definitive agreement to buy a 99.85 per cent stake in Denizbank from Russia’s Sberbank for 14.6 billion Turkish Lira ($3.2 billion), in a record-breaking overseas acquisition for a Dubai-based ban.

However, the deal was stalled for eleven months. In April, the bank said that the transaction would go ahead at a lower price than the $3.2 billion originally agreed, an amount below Denizbank’s book value at the time, according to Bloomberg.

The valuation adjustment is bigger than it looks, Bloomberg said, as the new deal removed a previous clause that required Emirates NBD to pay interest on the original purchase price.

The Denizbank deal came despite soured relations between Dubai and Ankara after Turkey backed Qatar in 2017 against a boycott led by Saudi Arabia, the UAE, Bahrain and Egypt.

According to analysts, Libya has recently become the proxy conflict for the two competing blocs in the Middle East -Saudi Arabia, and the UAE on one hand, and Qatar and Turkey on the other- which have been seeking to strengthen their influence in the region.