Raiffeisen International

With its network in Central and Eastern Europe (CEE), Raiffeisen International Bank-Holding AG is one of the region's leading banking groups. Raiffeisen International's merger with the operative business divisions of its parent company Raiffeisen Zentralbank Österreich AG (RZB) promises to secure the group's market position in the future as well. Raiffeisen International is a fully-consolidated subsidiary of RZB. RZB owns more than 70 per cent of the common stock, the balance is free-float. The shares are traded on the Vienna Stock Exchange.

As of 31 March 2010, Raiffeisen International managed subsidiary banks, leasing companies and a number of other financial service providers in 17 markets of the region. 56,000 employees served more than 15 million customers in around 3,000 business outlets. This presence provides Raiffeisen International with one of the most extensive and closely-knit distribution networks of the international banking groups active in the region.

In February 2010, RZB and Raiffeisen International disclosed that they were considering a merger as a strategic option. This merger would bring RZB’s principal business areas – above all, its business with Austrian and international corporate customers – together with those of Raiffeisen International. The merged bank would be strengthened in its position as one of the leading universal banks in CEE through the combination of Raiffeisen International’s broad distribution network in the CEE region and RZB’s comprehensive product portfolio. The bank would remain listed on the Vienna Stock Exchange and would be active primarily in the areas of retail (in CEE), corporate and investment banking. The business associated with RZB's function as central institution of the Austrian Raiffeisen Banking Group would continue to be conducted by RZB.

The two companies are continuing to intensively pursue this merger. The valuation ratios of the units included in the merger were determined on 30 May 2010; the underlying results are confirmed by reports from two renowned auditing companies, which were appointed as independent experts by both parties.

On this basis, 21.5 per cent of Raiffeisen International shares will be in free float after the transaction has been completed (until now: 27.2 per cent; both figures include own shares held by Raiffeisen International). The merger would increase earnings per share in the first quarter of 2010 attributable to the hitherto existing Raiffeisen International shareholders from an actual € 0.55 to € 1.45 per share (based on a pro forma calculation).

The final approval for the transactions was granted in the course of both companies' Annual General Meetings (RZB on 7 July 2010, Raiffeisen International on 8 July 2010). The merger is still subject to the financial market authorities' approval, expected to be granted in the course of the third quarter.

Further details are included in the press release dated 8 July 2010.