Bank of America Signs Definitive Agreements With Banco Itau on Chile and Uruguay Operations
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CHARLOTTE, N.C., Aug. 9 /PRNewswire-FirstCall/ -- Bank of America Corporation has entered into definitive agreements to exchange its BankBoston operations in Chile and Uruguay for stock in Banco Itau Holding Financeira S.A. (Itau). These agreements follow a similar transaction for the operations of BankBoston in Brazil that was announced on May 2. At that time, it was also announced that the two companies would negotiate exclusively with respect to the Chile and Uruguay businesses.
The total consideration for the Chile and Uruguay operations is approximately $650 million in Banco Itau stock and other consideration. Each closing is subject to regulatory approval and usual and customary closing conditions. Closing of the Brazil, Chile and Uruguay transactions will result in Bank of America holding approximately 7.4% of the equity of Itau through voting and non-voting shares. Bank of America will also have one member on Itau's Board of Directors.
"We are pleased to conclude negotiations on this important transaction with Banco Itau," said Richie Prager, President, Latin America for Bank of America. "With regional capability spanning the critical markets of Brazil, Chile, Uruguay and Argentina, Banco Itau will be uniquely positioned to provide outstanding service to clients in the region and to multinational clients with significant regional needs. With a significant investment in one of the region's market leaders and a seat on its Board, Bank of America looks forward to being a part of growth in these vibrant markets."
BankBoston has 50 offices and sales outlets in Chile. It employs approximately 1,500 associates and has total assets of approximately $2.9 billion. BankBoston has done business in Chile since 1979. It is one of the leading foreign banks in Chile serving retail and wholesale customers with an attractive suite of products tailored for each client segment.
In Uruguay, BankBoston and OCA, the credit card company that is also included in this transaction, have more than 35 offices and sales outlets, employ approximately 900 associates and have total assets of approximately $1 billion. BankBoston has done business in Uruguay since 1976 and is one of the largest private sector banks in the country. OCA is the most prominent card issuer with a significant presence and market share in credit card issuance.
"To participate in those remarkable economies, with great development and a good growth potential, gives us the opportunity to increase our presence in the Latin American market. In Chile and Uruguay, we are going to continue the good work that is already done, believing that Itau will contribute with its operational and technological expertise," said Roberto Setubal, Banco Itau Holding Financeira's CEO.
Itau is one of Brazil's largest financial institutions, with assets of approximately $65 billion, total equity of approximately $6.7 billion and a market capitalization of $33 billion as of June 30, 2006, the highest of any financial institution in Latin America. With 53,000 employees, the bank has over 3,200 points of sale, more than 22,000 ATMs and more than 17 million clients. Itau provides a full range of banking products and services and, among Brazilian banks, is the leader in corporate banking, credit cards, private banking and the high net worth individuals segment. Itau is considered the most sustainable and ethical bank in Latin America by the Latin Finance/Management & Excellence.
Bank of America is one of the world's largest financial institutions, serving individual consumers, small and middle market businesses and large corporations with a full range of banking, investing, asset management and other financial and risk-management products and services. The company provides unmatched convenience in the United States, serving more than 54 million consumer and small business relationships with more than 5,700 retail banking offices, nearly 17,000 ATMs and award-winning online banking with more than 19.8 million active users. Bank of America is the No. 1 overall Small Business Administration (SBA) lender in the United States and the No. 1 SBA lender to minority-owned small businesses. The company serves clients in 175 countries and has relationships with 98 percent of the U.S. Fortune 500 companies and 79 percent of the Global Fortune 500. Bank of America Corporation stock (NYSE: BAC) is listed on the New York Stock Exchange.
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