2007'02.01.Thu
Banco Itau Holding Financeira S.A. And ITAUSA -- Investimentos Itau S.A. Announce Acquisition of BankBoston's Operations in Latin America
PR
May 03, 2006
SAO PAULO, Brazil, May 3 /Xinhua-PRNewswire/ --
1. Banco Itau Holding Financeira S.A. (NYSE: ITU)
(ITAU) and Itausa -- Investimentos Itau S.A. (ITAUSA)
announce today that they have entered into an agreement
with Bank of America Corporation (BAC) dated 05-01-2006
which involves:
* The acquisition of BankBoston (BKB) in Brazil by ITAU
pursuant to the issuance of 68,518 thousand non-voting ITAU
shares, equal to an approximate 5.8% share of ITAU's total
capital;
* The exclusive right for ITAU to acquire BKB's
operations in Chile and Uruguay, as well as certain other
financial assets owned by clients of Latin America.
This transaction, the largest stock swap ever to be
completed in the Brazilian financial services industry,
secures ITAU's leadership amongst private Brazilian
institutions in the asset management, custody business, and
in the high net worth individual and large corporate sectors
and provides it with the opportunity to expand its
operations into new markets in Latin America.
2. DESCRIPTION OF THE ACQUIRED BUSINESSES
BankBoston Brazil
With R$ 23 billion in assets, BKB Brazil is a
recognized leader in the main segments where it operates
such as the high net worth individuals segment, including a
significant credit card operation, as well as the small,
middle market and large corporate sectors. With
approximately R$ 26 billion in assets under management, BKB
has a strong presence in this market in Brazil.
BankBoston Chile
Chile's mature and stable economy and its financially
solid institutions have earned the country an Investment
Grade, Baa1 rating by Moody's. BKB Chile has total assets
of R$ 5 billion, with 44 branches and 58,000 clients,
ranking 12th amongst the Chilean financial institutions in
terms of total assets.
BankBoston Uruguay and OCA
BKB Uruguay has a significant presence in the market
with 15 branches, ranking 3rd amongst the private banks in
terms of total assets.
The credit card company OCA has 23 branches and is
currently the largest credit card issuer in Uruguay with a
market share of approximately 50%.
BKB Uruguay and OCA jointly serve approximately 372,000
clients.
3. PURCHASE PRICE AND TRANSACTION STRUCTURE
* The acquisition of BKB Brazil will be effected in
stock pursuant to the issuance of 68,518 thousand new
non-voting ITAU shares, equal to an approximate 5.8% share
of ITAU's total capital. Based on the non-voting shares
average price on 04-28-06, these newly-issued shares would
be valued at
R$ 4.5 billion.
* The same transaction structure is expected for the
remaining acquisitions in valuation and the amounts
involved will be generally in line with their respective
asset bases vis-a-vis BKB Brazil.
* BAC will become a shareholder of ITAU, thus
maintaining an important presence in the region, through a
significant investment, and will appoint one member of
ITAU's Board of Directors. BAC shall not increase its
stake above 20% of the issued and outstanding capital of
ITAU. The new shares to be issued will be subject to a
3-year lock-up and BAC will not have a right of first
refusal, but will have tag along rights, in the event of a
change of control at ITAU.
The acquisition of BKB Brazil will be effected pursuant
to a Brazilian stock merger and will therefore not give rise
to preemptive subscription rights on the part of ITAU's
current shareholders.
It is management's intention to effect the write-off of
the goodwill amount resulting from this transaction in the
fiscal year of 2006. It is estimated that ITAU's net income
will be reduced in R$ 2.2 billion in 2006, net of taxes, as
a result of the amortization of goodwill. These
write-offs, however, should not impact dividends/interest
on own capital distributions to the pro forma shareholder
base in the year, which should be higher than those paid
out in 2005.
Based on the pro forma consolidated data as of
12-31-05, the Basle Ratio will be only slightly affected,
equaling 16.7% pro forma for the goodwill amortization.
The transaction is expected to be EPS accretive in the
second half of 2007.
4. PRO FORMA ANALYSIS
The following table provides a pro forma analysis of
some of ITAU's key metrics and variables taking into effect
the results of the transaction including all of BKB's
businesses:
PRO
FORMA
INFORMATION AS OF BKB BKB
Combined Evol.
DEC. 31, 2005 ITAU Brazil(*)
Ex-Brazil(1) ITAU+BKB %
R$ Billions
Assets 151.2 22.6 7.4
181.2 19.8%
Loans (including
sureties and
endorsements) 67.8 11.6 4.2
83.6 23.4%
Deposits 52.0 5.9 5.0
62.9 21.0%
Assets under
Management (AUM) 120.3 26.0 22.4
168.7 40.3%
Shareholders'
Equity 15.6 2.1 1.1
18.9 21.6%
US$ Billions
Assets 64.6 9.7 3.2
77.4 19.8%
Loans (including
sureties and
endorsements) 28.9 5.0 1.8
35.7 23.4%
Deposits 22.2 2.5 2.1
26.9 21.0%
Assets under
Management (AUM) 51.4 11.1 9.6
72.1 40.3%
Shareholders'
Equity 6.6 0.9 0.4
8.1 21.6%
# of Employees 51,036 4,800 2,200
58,036 13.7%
# of Clients
(thousand) 16,649 203 450
17,303 3.9%
# of Branches 2,391 66 82
2,539 6.2%
Efficiency Ratio(*) 50.3% 77.3% 78.0%
52.7% 2.4 p.b.
Basle ratio 17.0% 14.7% 15.8%
16.7% -0.3 p.b.
(*) Adjusted for hedge transactions at BKB
Brazil
(1) Transaction not concluded. ITAU holds an
option.
ITAU's pro forma market share in the Brazilian market
is summarized below:
ITAU
BKB PRO FORMA
ASSETS (*) 8.7%
1.4% 10.1%
LOANS
Large Corporates 8.7%
4.0% 12.7%
Small and Medium Corporates 9.9%
2.8% 12.7%
DEPOSITS (*) 7.6%
0.6% 8.2%
AUM (**) 13.4%
3.3% 16.7%
CREDIT CARDS (***) 18.4%
0.7% 19.2%
(*) Central Bank of Brazil - DEC 05
(**) ANBID - MAR 06
(***) ABECS - DEC 05
5. Key Drivers
The key drivers for the acquisition agreement are
summarized below:
* Leadership position in assets under management,
custody and in the high net worth individual and large
corporate sectors;
* Significant economies of scale in the large corporate
and middle market segment;
* Acquisition of a premium credit card client base;
* Opportunity to expand into foreign markets in which
ITAU does not currently have a presence.
ITAU views the addition of a set of highly qualified
professionals and of an attractive branch network to its
operations and current structure as key features of this
transaction. ITAU's experience in the recruitment and
retention of employees and the natural turn-over among
ITAU's own employees should lead to a smooth integration
process and to the maximum utilization of BKB's team.
ITAU will continue to strengthen its tradition of
providing differentiated service to its customers in the
various market segments. ITAU's current operations and
transactions with its clients, creditors and suppliers will
not experience any change as a result of the acquisition.
ITAU will continue to operate in Brazil and internationally
substantially in the same form as it does today.
A preliminary analysis of the loan portfolios of large
and middle market corporations has indicated that they are
complementary to ITAU's current portfolios, which should
allow for, in the majority of the cases, the maintenance of
its current levels of operation with the combined customer
base, at the current credit line levels.
ITAU's objective is to keep BKB's branches, which are
highly regarded for their superior facilities, and
integrate them with the Itau Personnalite branch network.
ITAU also intends to maintain BKB's relationship management
team so as to ensure the continuity of the high standards of
service provided to the high net worth individual segment.
BKB's individual and corporate clients will enjoy the
benefits of ITAU's structure such as its branch network,
ATMs and its Internet Banking service (Bankline) as soon as
the integration of BKB's into ITAU's operations is
completed. It is expected that this integration will be
completed within 6 months after the closing of this
transaction.
In the context of their new partnership, ITAU and BAC
will pursue business opportunities which may be mutually
beneficial. As an example, ITAU will seek to serve BAC's
clients in Brazil and to handle remittances from/to the
U.S. through BAC.
6. IMPACT OF THE TRANSACTION ON ITAUSA
Taking into effect the capital increase at ITAU to be
effected in connection with the stock merger, the variation
of its economic stake and the amortization of goodwill, it
is estimated that ITAUSA's net income will be positively
impacted in the amount of R$0.6 billion.
7. BANCO ITAU HOLDING FINANCEIRA
ITAU's sustainability, built over the course of the
last 60 years, is the result of a culture based on value
creation for its shareholders, on performance leadership
and ethics, associated with the quality of its services.
Today, these values are shared by 51 thousand employees
serving more than 16 million clients, through its network
of 2,391 branches and 22 thousand ATMs.
With a market capitalization of R$73 billion (US$ 35
billion) on 04-28-06, ITAU has been named Brazil's best
bank by several publications in the last 3 years,
including: Global Finance, Latin Finance and The Banker,
published by the Financial Times group. Ratings from
Moody's and Fitch Ratings place ITAU as the country's best
financial institution regarding financial strength and
individual rating. In August 2005, ITAU received the award
as Latin America's most ethical bank according to a survey
conducted by the rating company Management & Excellence
(M&E), based in Madrid, and by the American magazine
Latin Finance. In February 2006, according to Euromoney
magazine, for the second consecutive year, ITAU Private
Bank was the sole Brazilian institution listed among the
world's 10 best private banks with operations in Brazil.
ITAU is part of the DJSWI -- Dow Jones Sustainability
World Index, since its inception, and is the only Latin
American bank to be part of such index.
In 2005, the English consulting firm Interbrand rated
ITAU's brand as the most valuable Brazilian brand, at
US$1.3 billion.
8. ITAUSA -- INVESTIMENTOS ITAU S.A.
ITAUSA is one of Brazil's largest industrial and
financial conglomerates. Its international strategy is
based on the consistent maintenance of high liquidity
levels and a solid capital base in Brazil and abroad.
ITAUSA is comprised of a group of companies operating
in diverse segments such as the financial and real estate
sectors, as well as in the manufacturing of wood panels,
sanitary chinaware and metal fittings, chemical products
and electronics.
The high regard for human capital, ethical business
practices and the continuous and sustainable creation of
shareholder value are common aspects present in all of the
group's businesses. These principles ensure the group's
competitiveness through the continuous improvement in the
quality of services and products, based on in-house
development as well as the absorption of the most
state-of-the-art technologies available, and have enabled
the group to achieve a leadership position in the segments
in which it operates.
9. BANK OF AMERICA CORPORATION
BAC is one of the world's largest financial
institutions, serving individual consumers, small and
middle market businesses and large corporations with a full
range of banking, investing, asset management and other
financial and risk-management products and services. The
company provides unmatched convenience in the U.S., serving
more than 54 million consumer and small business
relationships with more than 5,700 retail banking offices,
more than 16,700 ATMs and award-winning online banking with
more than 19 million active users. BAC is the number 1
overall Small Business Administration (SBA) lender in the
United States and the number 1 SBA lender to minority-owned
small businesses. The company serves clients in 175
countries and has relationships with 98% of the US Fortune
500 companies and 79% of the Global Fortune 500. BofA stock
(NYSE: BAC) is listed on the New York Stock Exchange.
10. CONCLUSION
These acquisitions are consistent with ITAU's strategy
to invest in businesses that create value for its
shareholders, with a view towards the sustainability of the
bank and reaffirm ITAU's confidence in the future of Brazil.
The conclusion of this transaction is subject to the
approval of the Brazilian Central Bank of Brazil and other
relevant authorities.
Alfredo Egydio Setubal Henri Penchas
Investor Relations Director Investor
Relations Director
Banco Itau Holding Financeira S.A. Itausa --
Investimentos Itau S.A.
SOURCE Banco Itau Holding Financeira S.A.
-0- 05/02/2006
/CONTACT: Geraldo Soares, Banco Itau Holding
Financeira,
+011-5511-5019-1549, or investor.relations@itau.com.br/
/Web site: http://www.itau.com /
Post your Comment
広告
ブログ内検索
アーカイブ
カウンター