Bank Pekao, one of the largest lenders in Poland, has terminated talks on potential merger with another Polish bank Alior over differences in the terms of the agreement.
In a statement, Bank Pekao said: “The Management Board of the Bank hereby announces that the Banks did not reach an agreement with regard to the terms of their merger, which in the opinion of the Management Board of Pekao would generate the highest added value for shareholders of Pekao.”
In October last year, both the lenders signed a letter of intent to explore the possibility of a potential merger of operations and carry out a feasibility analysis in order to bring “additional value to their shareholders and clients”.
Pekao CFO Tomasz Kubiak told Reuters: “(The end of talks) results first from financial terms, which Pekao was not able to fulfill amid phase cycle and global challenges, which we start to see, as well as Alior Bank’s business model.”
Kubiak did not divulge further details of the merger, which was expected to have been advanced by the end of second quarter of this year.
State-run insurance group PZU holds interest in both the lenders. It holds 20% stake in Bank Pekao, while the insurance group acquired more than 30% interest in Alior in 2015.
Following the termination of merger talks, Bank Pekao stated that it will remain open for non-organic growth options that will support its current strategy.