SÃO PAULO, Brazil - The Brazilian bank Itaú Unibanco has acquired a controlling stake in the Chilean bank CorpBanca, a move that follows its growing ambitions to expand in Latin America.
The deal, announced on Wednesday, will be a stock-and-cash transaction. Itaú Unibanco will provide its Chilean unit, Itaú Chile, with $652 million in new cash. The Chilean unit will then merge with CorpBanca to create the new entity, to be named Itaú CorpBanca. Itaú Unibanco will also obtain 172 billion shares in CorpBanca, valued at about $2.2 billion, based on Tuesday’s stock price and Bloomberg data.
Itaú Unibanco will obtain a 33.58 percent controlling share in Itaú CorpBanca in one of the largest financial transactions in Latin America in years. As part of the deal, Itaú CorpBanca will also control CorpBanco and Itaú Unibanco’s entities in Colombia. CorpBanca’s assets in Colombia include Santander Colombia which it acquired in 2012.
Based on Tuesday’s prices, the new entity has a $59 billion market capitalization. It will be among the largest banks in Chile and Colombia, with $45 billion in assets and $34 billion in total loan portfolio.
The deal requires approval by regulators in Brazil, Chile, Colombia, Panama and the United States, as well as by shareholders. The companies said they would file for regulatory approvals in March and expect the transaction to close by the fourth quarter.
Jorge Andrés Saieh, chairman of CorpBanca, said during a conference call on Wednesday that he had already been in discussions with regulators and that he did not expect to have any issues with approvals.
Mr. Saieh said he was in negotiations for over a year. He will become chairman of Itaú CorpBanca. Boris Buvincic, the chief executive of for Itaú Chile, will be the first chief executive of the new entity.
Itaú Unibanco, with $447.5 billion in assets as of the third quarter last year, has sought to tap into the Chilean market for years. Out if its $19.9 billion Latin American assets outside of Brazil, $11.8 billion come from Chile according to 2013 third-quarter figures.
Itaú Unibanco moved into Chile in 2006 when it acquired Bank of Boston’s operations there. In 2011, it acquired HSBC’s premium banking services.
The deal comes at a time when several major Brazilian banks have been seeking to expand in the region.
BTG Pactual has recently made acquisitions in Chile, Peru, and Colombia. In the first half of this year, it expects to get banking licenses in Chile and Colombia, according to the Brazilian newspaper Estadao. Bradesco BBI is also increasingly focused on regional transactions.
