MADRID: Banco Santander said Friday it plans to launch an exchange offer to buy the outstanding shares of its Brazilian subsidiary that it does not already own, offering a 15% premium in a deal valued at up to €1.9 billion.
The Spanish banking group intends to acquire all remaining common shares, preferred shares, units and American Depositary Shares of Santander Brazil, which represent about 10% of the Brazilian unit’s share capital. The offer would be carried out through voluntary and concurrent exchange tender offers in Brazil and the United States, the bank said.
Under the terms of the deal, Santander Brazil shareholders who accept the offer would receive 0.4056 newly issued Banco Santander shares for each unit or ADS, and 0.2028 newly issued shares for each common or preferred share. The new shares would be delivered as Brazilian Depositary Receipts or ADSs, tradable on the São Paulo stock exchange and the New York Stock Exchange, respectively.
The offer represents a 15% premium over the reference share price of a Santander Brazil unit, the bank said. If all minority shareholders tender their shares, Santander would issue about 156 million new shares — roughly 1.1% of its current share capital.
The offer is voluntary and will not be subject to a minimum acceptance condition, according to the company. Santander said it does not intend to delist Santander Brazil, which would remain listed on the São Paulo exchange and, subject to regulatory approval, the New York Stock Exchange. Depending on the results of the offer, however, Santander Brazil’s ADSs could be removed from the New York Stock Exchange and deregistered with the U.S. Securities and Exchange Commission.
Ana Botín, executive chair of Banco Santander, said the move reflects the bank’s long-term commitment to Brazil.
“Brazil is one of Santander’s core markets, with strong long-term fundamentals, a large and growing customer base and significant opportunities for profitable growth,” Botín said in a statement. “This transaction is a further step in our strategy of simplifying the group, while reinforcing our long-term commitment to Brazil.”
Santander said the transaction is expected to be neutral to its capital ratio while boosting earnings per share by about 0.5% and tangible book value per share by about 0.6% starting in 2028, based on current market expectations.
As part of the process, Banco Santander said it will apply to register as a foreign issuer and to list its shares for trading in Brazil through a Brazilian Depositary Receipt program. The bank also said it will seek shareholder approval for a corresponding capital increase at its general shareholders’ meeting.
The deal is subject to customary conditions, including regulatory approvals, shareholder approval of the capital increase and the absence of any material adverse change, the company said.
Santander said it will file a registration statement with the SEC and a tender offer notice with Brazil’s securities regulator, the Comissão de Valores Mobiliários, once the offer moves forward. The company said the announcement does not constitute an offer to sell or a solicitation to buy securities in any jurisdiction where such an offer would be unlawful.
