Banco Santander, the largest Spanish lender, said Wednesday that it would buy Bank of America’s 24.9 percent stake in Santander’s Mexican arm for $2.5 billion, giving it almost total ownership of the unit.
Santander said the deal, which had been widely expected by analysts, was set to close in the third quarter, subject to the customary regulatory approvals.
The Spanish bank said the deal would increase its earnings per share by 1.3 percent in the first year.
Business abroad has been one of the strengths of Santander’s balance sheet, and the bank said that the acquisition would boost Mexico’s part of group profit by two percentage points to 7 percent.
“This acquisition reinforces Santander’s commitment to Mexico, a country with a very positive outlook for growth, and furthers the geographic diversification of our group,” Emilio Botín, Santander’s chairman, said in the statement.
The bank’s first quarter earnings report showed that the bulk of its profit growth was coming from its Latin American units, with the Brazil business increasing profit by 38 percent to 603 million euros, Mexico by 32 percent to 111 million euros, and Chile by 15 percent to 117 million euros, while some European units — notably in the Iberian peninsula — were posting declines.
Banco Santander Mexico is one of the country’s largest lenders, making 13 percent of all loans and taking in nearly 15 percent of all deposits.
Bank of America will divest itself of a stake it acquired in 2003 for $1.6 billion. At the time, the purchase valued the Mexican bank at $6.4 billion, while the current transaction puts its worth at $10 billion — a 56 percent increase in seven years.
source:http://dealbook.blogs.nytimes.com/2010/06/09/santander-buys-2-5-billion-bofa-stake-in-mexico/?ref=globa
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