Grupo Financiero Banorte SAB, Mexico’s third-largest lender, agreed to buy Ixe Grupo Financiero SAB for 16.2 billion pesos ($1.31 billion) to expand in the nation’s capital and gain wealthier customers.
Banorte, based in Monterrey, will issue 308 million new shares and exchange 0.389 of its own shares for each Ixe share, Banorte said in an e-mailed statement. Banorte agreed to pay 2.1 times Ixe’s book value, more than the median deal of 1.65 times since Jan. 2009 in Latin America commercial bank acquisitions.
“They have very different market segments; they have very different ways of approaching their own clients,” Alejandro Valenzuela, Banorte’s chief executive officer, said today on a conference call. “That’s why they’re extremely complementary.”
Banorte has used takeovers, including the 2001 acquisition of Bancrecer SA, to grow into a national financial group from a north-Mexican regional lender since the country’s banking industry collapse in 1995. The Ixe purchase will probably close in the first quarter, and the combined banks will be called Grupo Financiero Banorte-Ixe, Banorte said.
Ixe shareholders will have a nine-month “lock-up” period after the transaction, during which they won’t be able to sell their new Banorte shares, Valenzuela said. The combined companies will have 2011 profit of about 8.4 billion pesos, with savings of as much as 1.4 billion pesos in the first 12 months after the completion of the deal, Valenzuela said.
The deal solidifies Banorte’s position as Mexico’s No. 3 lender behind the local units of Banco Bilbao Vizcaya Argentaria SA and Citigroup Inc., said Mario Pierry, an analyst at Deutsche Bank AG, who covers Latin America’s financial industry.
“It definitely strengthens Banorte’s position in Mexico,” Pierry said in a telephone interview last week. “It becomes the third-largest bank in terms of assets, deposits, branches, so it definitely improves Banorte quite a bit.”
Ixe’s shareholders will receive a 14 percent premium over the average stock price in the 20 days prior to the announcement. That compares to an average 51 percent in 41 deals made in Latin America’s commercial banks in the same period, according to data compiled by Bloomberg.
Banorte shares fell 0.4 to 53.62 pesos in Mexico City trading at 4:10 p.m. New York time. The shares have gained 12 percent this year.
Ixe’s shares closed at 15.35 pesos on Sept. 29, the last day that they traded before Banorte announced on Oct. 1 that it was studying the acquisition of Ixe. The shares of the smaller bank, which have traded on only seven days this month, today reached a high of 19.79 pesos.