In a move that is expected to form the third-largest bank in Romania, UniCredit has announced plans to merge with the Romanian branches of Alpha Services & Holdings. Alpha Bank Romania will maintain a 9.9% stake in the newly formed entity and is set to receive a cash consideration of €300 million upon the deal's expected closure in 2024.
Simultaneously, UniCredit has expressed its intention to acquire a majority stake in AlphaLife Insurance Company, the life insurance subsidiary of Alpha in Greece. This acquisition is still subject to due diligence and involves purchasing shares from the Hellenic Financial Stability Fund.
These strategic moves are projected to have a significant impact on UniCredit's equity ratio while also boosting its profits by over €100 million.
According to InvestingPro Data, UniCredit has a market cap of 41730.12M USD with a P/E ratio of 5.13. This indicates that the company is trading at a low earnings multiple, which is a sign of undervaluation. The company's revenue growth has been accelerating, as evidenced by a growth rate of 48.23% in LTM2023.Q2. This aligns with one of the InvestingPro Tips, which states that UniCredit's revenue growth has been accelerating.
In addition, UniCredit has been aggressively buying back shares, a strategy often used to increase earnings per share and provide value to shareholders. This is further supported by the company's strong dividend growth of 83.49% in LTM2023.Q2.
On the other hand, Alpha Services & Holdings, with a market cap of 3156.11M USD and a P/E ratio of 6.45, is also trading at a low earnings multiple. The company's revenue growth is impressive, with a rate of 158.15% in LTM2023.Q2. However, InvestingPro Tips suggests that the company is quickly burning through cash and suffers from weak gross profit margins.
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