The 79% stake will be purchased from Sociedad de Inversiones Norte Sur (39%), Credit Agricole (24%) and Intesa Sanpaolo (16%). These agreements are the first stage in a plan to purchase up to 100% of the Chilean bank, which would be valued at $1.03 billion.
The agreements include provisions to adjust the price based on due diligence and as required by local rules, Scotiabank will be making a public share offering on the same terms.
This is a unique opportunity to increase our market penetration in one of the most developed and attractive markets in Latin America, said Rick Waugh, Scotiabank president and CEO. It is consistent with our overall strategy of driving sustainable revenue growth by building our presence in countries where we have existing operations.
Today’s announcement is good news for the Chilean market and for micro, small and medium-sized businesses, said Vicente Caruz Middleton, president of Banco del Desarrollo. We see this agreement as an opportunity for Banco del Desarrollo to extend its horizons while staying faithful to its original mission and sharing Banco del Desarrollo’s know-how and business model with an experienced international partner. The resulting benefits for clients will mean continued success well into the future.
Banco del Desarrollo has total assets worth over $5.1 billion and a nationwide network of 74 branches, while Scotiabank’s Chilean subsidiary, Scotiabank Sud Americano, has total assets of $3.5 billion and 57 branches. The combined operations will create Chile’s sixth largest bank.
The agreements are subject to due diligence and regulatory approvals, and are expected to close in November 2007.
