National Bank of Greece to merge with Alpha Bank

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In November 2001, two Greek banks - the National Bank of Greece and Alpha Bank - announced their decision to merge. The two banks have given a commitment that no staff will be dismissed due to the merger. Trade unions have called for the protection of employment and workers' labour rights in the merger process.

On 1 November 2001, the boards of directors of the National Bank of Greece and Alpha Bank announced their decision to effect a merger between the two banks. In a joint press release issued by both banks on 20 November 2001, the two boards proposed that their general meetings should approve a share-exchange rate of seven shares in the new bank to nine shares in Alpha Bank. This will mean that National Bank and Alpha Bank shareholders will hold approximately 61.3% and 38.7% respectively of the shares in the new bank.

Under Greek legislation, the boards of directors of both banks must approve the draft merger agreement, and general shareholders meetings of both banks will ultimately be called in order to approve the proposed plan. However, it should be noted that completion of the merger is conditional upon the approval of the Hellenic Competition Committee and the Bank of Greece.

According to initial estimations by the boards of directors of the two banks, the general meetings of shareholders will take place before April 2002, and the legal merger will be completed during the first half of 2002.

The merger proposal submitted by the two banks is principally aimed at the following objectives:

  • increasing the size and scale of activities of the new group in the global and particularly in the European market, where competition is growing stronger every day;
  • putting the two banks' 'complementarity' and comparative advantages to the best use; and
  • enhancing the international presence and prestige of the new group, particularly in South-Eastern Europe and the international financial centres.

Among the anticipated benefits of the merger are: cost reductions; increased revenues; a stronger strategic position and prospects for the new group; economic benefits for the shareholders; and benefits for both customers and staff. In particular, the expanded group will offer a broader range of career opportunities to its staff. The two banks' boards of directors have made a voluntary commitment that no staff will be dismissed due to the merger of the two companies. It should be noted that the new group intends to continue to offer its staff voluntary retirement schemes, on the basis of the successful practice adopted in recent years by both banks. Together, the two banks now employ 23,000 people, who represent 42% of all Greek banking sector employees.

On the employees' side, the Greek Federation of Bank Employee Unions (OTOE) issued a press release on 9 November 2001. By unanimous decision of its executive secretariat, it describes the impending merger as the sector's most important economic and political development of recent years, a development that signals more widespread restructuring in the nation's credit institutions and economy. However, OTOE lays particular emphasis on the protection of employment and workers' labour rights. Thus, in the initial stages it sees the acceptance of the following framework as a necessary condition for success of the merger venture:

  • immediate adoption by the government of OTOE's recommendation for a law to create an institutional framework that will protect all bank employees in cases of mergers and acquisitions;
  • safeguarding of employment and the labour rights of employees under the new conditions being created by the merger;
  • the immediate resolution of the issue of workers' social insurance by creating a 'unified bank employees' insurance fund' for all bank employees. This is seen as a basic condition for achievement of the merger; and
  • the participation of OTOE and the trade union movement more widely in all merger processes.

At a meeting held on 12 November between the Greek General Confederation of Labour (GSEE) and the enterprise-level union in the National Bank of Greece, it was agreed that:

  • the primary objective of the trade union movement is to safeguard employment and workers' labour and social insurance rights; and
  • GSEE, in collaboration with OTOE, the National Bank of Greece enterprise-level union and the other bank employees' unions, will closely monitor the merger procedures and provide all legal and other support in order to safeguard employees' interests.
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