02 January, 2011

Brazil Bank Mergers & Acquisitions (Itaú Unibanco Holding)


Photo: A Banco Itaú branch in Curitiba, Paraná.

With special thanks to Rafael Duarte de Lima for taking and allowing me to use his photo. You can see more of his photo stream by clicking on this link: http://www.flickr.com/photos/litswd/


Itaú Unibanco Holding S.A.

Itaú Unibanco Holding S.A. was formed in 2008 by the merger of Banco Itaú Holding and Unibanco Holdings. The merger created Brazil’s largest financial services provider.


Itaú Holding Financeira S.A. (Banco Itaú) [1944 to 2008]

In 1945, Banco Central de Crédito was founded in São Paulo. The bank changed its name to Banco Federal de Crédito in 1953. The Brazilian economy was growing rapidly at this time, coinciding with a wave of Europeans immigrants looking for better opportunities. In 1964, the Brazilian government initiated a program to modernize its banking sector, and Banco Federal de Crédito was merged into Banco Itaú S.A. (founded 1944), taking up the new name Banco Federal Itaú. The consolidation wave continued and the bank took over Banco Sul Americano do Brasil in 1966 (with a name change to Banco Federal Itaú Sul Americano). In 1969, Banco da América was taken over.

Following the acquisition of Banco Aliança (in 1970), Banco Português do Brasil (1973) and Banco União Comercial (1974), the name of the bank was simplified to Banco Itaú S.A., which became Brazil’s No.2 private-sector bank at the time.

In 1980, Itaú opened its first overseas branch in New York, then another one in Buenos Aires. The computer age arrived in 1981 when the bank’s first main frame was installed, allowing real-time inter-branch data processing for the first time. The 1980s were tough time for Brazil though: a foreign currency debt crisis caused the currency to tumble, resulting in a major recession, high inflation and high interest rates for much of the decade.

In 1994, Itaú launched a subsidiary in Argentina and opened more than 30 branches in Buenos Aires. More recently, between 1997 and 2001, Banco Itaú acquired a number of domestic banks in Rio de Janeiro, Minas Gerais, Paraná and Goiás.

Recent transaction(s):

  • In 1995, Banco Itaú acquired from Crédit Lyonnais' 54.50% stake in Banco Francês e Brasileiro (BFB). Itaú subsequently made a public offering for the rest of the shares held by minority shareholders.
  • In 1998, Itaú bought Argentina's Banco del Buen Ayre for USD $213-million. Buen Ayre had 62 branches in Buenos Aires. Banco Itaú then merged its Argentine unit Itaú Argentina with Buen Ayre and adopted a new name Banco Itaú Buen Ayre. The new bank would have 94 branches and 349 ATM machines in the Argentine capital region.
  • Also in 1998, Itaú bought formerly state-owned Banerj (Banco do Estado do Rio de Janeiro) for BRL 311-million. Banerj had 193 branches in the state.
  • Also in 1998, Itaú bought 90.74% of Banco do Estado de Minas Gerais (BEMGE) for BRL 583-million. Acquiring BEMGE added 583 branches to Itaú's 112-branch network in the state of Minas Gerais.
  • In 2000, Itaú bought 88.04% of Banco do Estado do Paraná (Banestado) for BRL 1.625-billion. Banestado's 549 branches (519 of which in Paraná) significantly expanded Itaú's 63-branch network in the state.
  • In 2001, Itaú acquired 84.46% of Banco do Estado de Goiás (BEG) for BRL 665-million. BEG had 264 branches or points of sale.
  • Also in 2001, Itaú made an offer to buy Banque Sudameris (Paris) S.A. from Italy’s IntesaBci (now Intesa Sanpaolo) for up to USD $1.6-billion. However, the proposal failed and IntesaBci eventually sold Sudameris (Paris)'s subsidiary Banque Sudameris Brasil to ABN AMRO Banco Real (now Santander Brasil).
  • In 2002, Itaú took over Banco Fiat from Fiat SpA for BRL 897-million (USD $243-million). Banco Fiat was the market leader in financing Fiat cars in Brazil.
  • In 2003, Itaú acquired 96% of Banco BBA-Creditanstalt S.A. for BRL 3.3-billion (USD $900-million). A major wholesale bank in Brazil, Banco BBA-Creditanstalt provided commercial banking, asset management, brokerage service as well as investment banking to business clients. Itaú acquired 48% of BBA Creditanstalt from Bank Austria Creditanstalt, a unit of Germany's HVB Group, and another 48% from local shareholders.
  • In 2006, Banco Itaú bought Bank of America's Brazilian-based BankBoston for BRL 4.5-billion (USD $2.2-billion) in stock. Bank of American would end up holding a 5.8% stake in Banco Itaú. BankBoston provided banking services to high net-worth clients in Brazil, Chile and Uruguay.
  • Also in 2006, Itaú bought from Bank of America's BankBoston International and BankBoston Trust Co. Ltd. for USD $155-million, both banks offered private banking services.
  • In 2008, Banco Itaú Holding acquired Unibanco Holdings to form Brazil’s and Latin America’s largest bank. The deal was valued at BRL 26.5-billion (USD $12.3-billion). Existing Itaú shareholders would own 66% of the new entity, to be known as Itaú Unibanco Banco Múltiplo S.A., with Unibanco shareholders owning the rest. The combination was said to have been spurred by Banco Santander’s purchase of ABN AMRO Banco Real in 2007. Itaú Unibanco would leapfrog state-owned Banco do Brasil to become the nation’s largest bank with 4,800 branches and 30,000 ATMs serving 14.5-million clients.
  • In August 2009, Itaú Unibanco and insurer Porto Seguro agreed to combine their home and automotive insurance operations to a holding company called Porto Seguro Itaú Unibanco Participações S.A. (“PSIUPAR”). Existing shareholders of Port Seguro would own 57% of PSIUPAR and Itaú Unibanco would own 43% of PSIUPAR. PSIUPAR would in turn control 70% of insurer Port Seguro S.A. and the remaining 30% remains floated in the market.
  • In April 2011, Itaú Unibanco bought 49% of Banco Carrefour for BRL 725-million (EUR 315-million) from French retailer Carrefour. Banco Carrefour provided banking and credit card services to 7.7-million clients in Brazil.
  • In September 2012, Itaú Unibanco made a public tender offer to acquire 44% of bank and credit-card processor Redecard S.A. for BRL 10.46-billion (USD $5.1-billion). Itaú Unibanco already owned 50% of Redecard before the offer.
  • In May 2013, Itaú Unibanco bought Citigroup's Brazilian credit card operations Banco Citicard S.A. and Credicard operations for BRL 2.77-billion (USD $1.37-billion). Banco Citicard and Credicard had 4.8-million clients and 96 points of sale.
  • In January 2014, Itaú Unibanco and Chile's Corp Group agreed to combine their Chilean banking operations.  Under the deal, Itaú Unibanco would inject USD $652-million into Banco Itaú Chile, which would then be merged into Corp Group's CorpBanca to form Itaú CorpBanca. Following the merger, Itaú Unibanco would own 33.58% of Itaú CorpBanca and Corp Group would own 32.92%.  Itaú CorpBanca would have 226 branches in Chile and 172 in Colombia.
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