June 20 (Bloomberg) -- Mizuho Financial Group Inc., Japan’s third-biggest bank by market value, agreed to buy WestLB AG’s Brazil unit to tap demand for infrastructure related financing.
The purchase of Banco WestLB do Brasil from Dusseldorf-based WestLB is pending regulatory approval, Mizuho said in a statement on its website. The Tokyo-based bank didn’t disclose terms of the transaction.
Mizuho and bigger rivals Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. aim to gain market share abroad from European competitors selling global assets to cope with the region’s debt crisis. Japanese lenders are looking to higher-yielding markets to make up for declining profitability on domestic loans as interest rates tumble.
Banco WestLB do Brasil had total assets valued at about $1.5 billion at the end of December and employs about 66 people, mainly involved with wholesale banking, Mizuho said in the statement.
For the deal with WestLB, Mizuho offered about 30 billion yen ($380 million) for the unit, national broadcaster NHK reported earlier.
Today’s agreement follows remarks made Mizuho Chief Executive Officer Yasuhiro Sato on June 4 in Istanbul reiterating the Japanese bank’s push to expand business overseas. Sato added that Mizuho also aims to get a bank license in Turkey, where it is advising on a 420-kilometer (261-mile) highway project, or acquire a stake in a Turkish bank.
Shares of the Japanese bank rose 1.6 percent to close at 128 yen at the 3 p.m. close of Tokyo Stock Exchange trading. The stock has advanced 23 percent this year, outpacing a 6.6 percent increase in the benchmark 84-stock Topix Banks Index.
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