Bank Leumi acquires Romania's Eurom for $34 Million

Bank Leumi Le-Israel Ltd., the country's second-largest lender, bought Romania's Eurom Bank SA as Israel's biggest banks look to expand abroad to make up from regulatory limits on domestic growth. The bank will pay $34 million to Kolal BV for a 99% stake in Eurom, about 18% less than it said it would pay last November when the acquisition was first announced, Leumi said on a statement to the Tel Aviv Stock Exchange on Sunday. „Eurom is a small retail bank, which we see as a platform to develop our businesses in Romania,” Daniel Tsiddon, the incoming head of capital markets at Tel Aviv-based Leumi, said by telephone. Leumi and Bank Hapoalim Ltd., the country's biggest lender, are buying banks overseas because Israeli regulators won't let them expand market share at home. They are also being forced to sell non-bank businesses such as fund management units and interests in holding companies. Shares of Leumi rose as much as 0.20 Israeli shekel, or 1.2%, to 15.92 in Tel Aviv and traded at 15.75 shekels at 1:55 p.m. local time. Eurom, with 30 branches across the country, accounts for about 0.5% of Romania's banking assets, Tsiddon said. It has equity of about $20 million and $150 million in assets. „Our strategy is to utilize the large number of Israeli businesses active in Romania to expand our banking activity in the local market,” he said. Last November, Leumi said it agreed to buy 95% of Eurom for $41.7 million and take an option to purchase more within six months. The new price was determined after the two parties conducted unspecified „offsets,” Leumi said. (Bloomberg)