McKinsey & Company - Corporate Finance - Expansion into Eastern Europe

Expansion into Eastern Europe

Our client, a leading European bank, had significant growth ambitions. It had participated successfully in the consolidation of its home market, but also realized that further expansion opportunities there would be limited.

The client was then invited to participate in a large-scale bank privatization in Eastern Europe. The bank had no large-scale international activities at that time, but had long regarded Eastern Europe as a potential growth area and decided to pursue the opportunity.

The situation was complex in terms of the “emerging markets” economic environment and the uncertainty concerning the future development of the bank and the market in general. A joint team of client members and McKinsey experts was created, with McKinsey contributing corporate finance specialists and local banking expertise. The team’s main tasks were:

	To assess the attractiveness of the target’s country banking market and of the target itself

	To develop a valuation and a price range for the bidding process, including the development of a post-acquisition strategy.

	To embed the acquisition opportunity within the client’s growth strategy.


	The approach: Scenario analysis and valuation

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