Bank Leumi agreed Monday to buy 95% of Eurom Bank in Romania from SC Kolal for $41.7m.
Leumi, which disclosed in September that it was in talks to buy the bank, said it also has an option to buy additional shares within six months of the deal closing. Chief Executive Galia Maor said the acquisition was in accordance with the bank's plans to increase its presence overseas.
"The purchase of the Romanian bank is part of the group's strategy to widen its international operations via, among other things, mergers and acquisitions," she said.
Eurom has 500 workers across 30 branches and its activities include retail banking, international trading, issuing credit cards and providing investment advice.
Ehud Shapira, Leumi's senior deputy CEO, said the purchase constitutes an opportunity to enter a new and developing market, especially one that could join the European Union.
Leumi had problems informing the press about the purchase, as industrial action prevented its e-mail system from working, a bank spokesman said. Workers also carried out other limited sanctions on Monday, with branches that were supposed to open in the afternoon remaining closed. On Tuesday, business branches are set to close at 11:00 am and, on Wednesday, employees at the bank's headquarters will not start work until 11:00 am. The workers are carrying out the action to ensure that their rights are safeguarded in the impending privatization of the bank.