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KFS and Cukurova have signed the final agreement for the acquisition by KFS of 57.42% of Yapi Kredi

On 31 January 2005, a preliminary share transfer agreement was executed between Koç Financial Services A.Ş . (KFS), 50% owned by UniCredit and 50% by Koç Group, and Çukurova Holding A.Ş. Yesterday, 8 May 2005 the parties have entered into a definitive share purchase agreement for the purchase of 57.42% shares of Yapı ve Kredi Bankası A.Ş. (YKB) held by the Çukurova Group and Savings Deposit Insurance Fund (SDIF). The purchase price for 100% of YKB shares is calculated using a price of Euro 2,021 million (implied purchase price for the 57.42% shareholding Euro 1,160 million), subject to a price adjustment based on the market value of YKB's participations in Turkcell at closing.

On closing, the substantial part of the purchase price will be used by Çukurova towards part repayment of the Çukurova Group's loans owed to YKB and the Çukurova Group's loans will be reviewed and restructured to ensure the performance and orderly repayment of the loans. In addition, Çukurova will be given the right to acquire YKB's participations in Turkcell. Çukurova will also purchase from YKB its shareholdings in Fintur, Digitürk and Superonline.

Pursuant to the share purchase agreement, it is anticipated that the share transfer will take place as soon as possible subject to obtaining various contractual and procedural conditions agreed between the parties including, without limitation, authorisations from all necessary governmental authorities such as the Banking Regulation and Supervision Agency (BRSA), Competition Board, Capital Markets Board (CMB) and other foreign competent authorities.

Following closing of the share purchase agreement and after obtaining the relevant approvals from the Capital Markets Board, KFS will make a tender offer to the public shareholders of YKB for all the remaining shares.

Rationale for the Transaction

The transaction is the result of UniCredit and Koç Group's strategic focus on growing in the financial services sector in Turkey. Both UniCredit and Koç Group share a strong enthusiasm for the growth prospects of the Turkish economy overall as well as the Turkish financial services. Following the acquisition of YKB, UniCredit and Koç Group through their joint-venture KFS, will create one of the top three privately-owned banking groups in Turkey in terms of total assets, deposits and loans. KFS' financial services network will constitute a premier franchise through its combined ca. 7 million customers and over 560 branches across the country.

KFS sees a strong operational fit between Koçbank and YKB. The combined group will have strong distribution and highly specialised production platforms as well as one of the leading positions in most strategic financial services sectors.

Commenting on the transaction, Koç Holding said: "We are pleased to have reached a successful conclusion to the negotiations. With the acquisition of YKB by KFS, not only does Koç Group become one of the leaders in the Turkish financial sector, but also this transaction significantly reduces systemic risks in the banking sector."

Commenting on the transaction, UniCredit said: "After the successful experience of our partnership with the Koç Group, we are keen to further develop our position in the Turkish market and our regional expansion. Following the acquisition of YKB, Turkey will represent approximately 25% of the total assets of UniCredit's New Europe Division."

Brief description of KFS

KFS is a holding company established in March 2001 by the Koç Group to provide a transparent ownership structure and create synergies among the Koç Group's companies operating in the financial sector. In October 2002, the Koç Group established a strategic partnership with UniCredit through the acquisition of a 50% shareholding in KFS by UniCredit.

Leveraging on its strong shareholders' structure and the financial results achieved since 2002, KFS is today one of Turkey's leading financial services groups with a strategy focused on the growth of its commercial banking operations, under the guidance of a strong management team.

As at 31 December 2004, KFS recorded excellent financial results (audited under IFRS), with a net profit of Euro 145 million and 23% ROE, 40% cost/income and 21% capital adequacy ratio. As at the same date, the group served over 1.1 million clients through a multi-channel distribution network of 163 branches, 294 ATMs, ca. 26,000 POS and 3,921 employees.

KFS owns seven financial companies, of which the main ones are Koçbank, No. 5 Turkish private bank in terms of total asset of Euro 5.8 billion (No. 8 also including state banks), and with a market share of 3.7% in terms of customer deposits (Euro 3.9 billion) and 3.8% market share in terms of customer loans (Euro 2.2 billion), Koç Lease, Koç Faktor, Koç Portfoy (No. 3 mutual fund manager with 12.1% market share) and Koç Yatırım (brokerage company of the group).