Canada’s The Bank of Nova Scotia (Scotiabank) will acquire 68 % in the Chilean unit of Spain’s Banco Bilbao Vizcaya Argentaria (BBVA) for approximately USD 2.2bn.
The deal values BBVA Chile to more than twice its book value and to around 20 times its earnings. The lender has CAD 29bn (USD 23bn) in total assets, 4,000 employees and 127 branches.
Upon the successful completion of the deal, Scotiabank plans to merge its own Chilean operations with BBVA Chile, thus nearly doubling its local market share to 14% and creating the third largest private lender in Chile.
The Said family, which holds 31.6% of BBVA Chile, has waived its right of first refusal to purchase the remaining shares in the lender. The family however remains committed to its investment and plans to inject up to USD 500mn in the new merged entity in order to keep 25% ownership.
According to Brian Porter, president and CEO of Scotiabank, the transaction demonstrated excellent synergy between two banks with customer-centric cultures. Ignacio Deschamps, Head of International Banking and Digital Transformation at Scotiabank, said that the deal would provide opportunities to accelerate the digital transformation of BBVA Chile.
Meanwhile, in another landmark transaction from late December, U.S. insurer UnitedHealth Group agreed to acquire 100% in Chilean peer Empresas Banmedica for USD 2.8bn.
Find our more about this deal on EMIS DealtWatch