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Santander Launches Offer for 10% of Its Brazil Subsidiary It Doesn't Control for 1.9 Billion Euros, Offering a 15% Premi
🇪🇸 Spain /Economy & Trade

Santander Launches Offer for 10% of Its Brazil Subsidiary It Doesn't Control for 1.9 Billion Euros, Offering a 15% Premium

From El País · () Spanish

Translated from Spanish, summarized and contextualized by DistantNews.

At a glance

News Official statement New plan
  • Banco Santander has launched an offer to acquire the remaining 10% of its Brazilian subsidiary it does not control.
  • The offer values the stake at approximately 1.9 billion euros, representing a 15% premium over its last trading price.
  • This move aims to consolidate Santander's control over its Brazilian operations, leveraging the subsidiary's lower valuation compared to the parent company.

Banco Santander announced an offer to fully control its Brazilian subsidiary by acquiring the approximately 10% stake it does not currently own. The Spanish banking giant, led by Chair Ana Botín, proposes a share swap valued at a maximum of 1.908 billion euros, which includes a 15% premium on the subsidiary's latest stock price.

The proposed exchange involves issuing new Banco Santander shares: 0.4056 new shares for each unit or American Depositary Share (ADS) of Santander Brasil, and 0.2828 shares for each ordinary or preferred share of Santander Brasil. This strategic move seeks to capitalize on the comparatively lower valuation of Santander Brasil, a situation that has been speculated about in the market since early last year.

Santander Brasil's stock valuation has lagged behind its parent company, partly due to growing credit concerns in Latin America's largest economy. However, as Banco Santander's share price has gained momentum, the valuation gap has widened, positioning the Spanish bank as Europe's most valuable. The offer aims to consolidate this advantage and streamline operations.

reflects Banco Santander in Brazil and the growth potential of its business in the country

— Banco SantanderStating the bank's confidence and strategic rationale behind the offer.

If all minority shareholders accept the offer, Santander would issue roughly 156 million new shares, representing about 1.1% of its current share capital. The transaction will be conducted through simultaneous voluntary public exchange offers in Brazil and the United States. While Santander states it does not intend to delist the Brazilian subsidiary, the shares could potentially cease trading on the New York Stock Exchange and have their registration canceled with the U.S. Securities and Exchange Commission (SEC) depending on the offer's outcome.

Santander emphasized that the operation "reflects Banco Santander's confidence in Brazil and the growth potential of its business in the country." The bank views the offer as an "attractive alternative" to other capital allocation strategies, projecting a neutral impact on its capital ratios.

an attractive alternative

— Banco SantanderDescribing the offer in relation to other capital allocation options.
DistantNews Editorial

Originally published by El País in Spanish. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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