- Criteria will pay combined 2.65 billion euros for stakes
- Deal expected to be completed in first quarter of 2016
CaixaBank SA is selling its stakes in billionaire Carlos Slim’s Grupo Financiero Inbursa SAB and Bank of East Asia Ltd. to its parent company Criteria Caixa SA, helping the lender to cut its capital consumption.
Criteria will pay a combined 2.65 billion euros ($2.9 billion) for the stakes, CaixaBank said in a statement Thursday, after Bloomberg reported that the Spanish lender was planning to sell its holdings. Criteria will pay 642 million euros in cash and the rest by transferring CaixaBank shares, valued at about 2 billion euros.
CaixaBank shares climbed 1 percent at 12:33 p.m. in Madrid after gaining as much as 2 percent earlier. The sale will reduce the lender’s capital consumption from minority stakes to 8.1 percent, below the 10 percent target it had set for the end of 2016, according to the statement. The deal is expected to close in the first quarter of next year.
“The operation is a smart way to reduce the uncertainties that have been keeping the stock’s performance down, while allowing the bank to focus more on its core business,” Alfredo Alonso, an analyst at Kepler Cheuvreux SA, said in a research note Friday.
CaixaBank owns about 9 percent of Inbursa as well as a 17 percent stake in Bank of East Asia, and is the second-largest holder in both businesses, according to data compiled by Bloomberg. Chief Executive Officer Gonzalo Gortazar is focusing on reviving returns and increasing profitability at the Barcelona-based lender.
Bank of East Asia fell 0.5 percent to HK$27.60 at the close of trading in Hong Kong on Friday. Inbursa shares fell 2.3 percent to 31.59 pesos in Mexico trading Thursday.
“Our strategic relationship with CaixaBank will remain intact and Criteria Caixa will continue to be a long-term strategic shareholder,” Bank of East Asia said in an e-mailed statement.
The Spanish banking sector, which nearly collapsed in 2012 -- forcing the country to ask for 41 billion euros in funds from the European Union to bail out some of its lenders -- is consolidating to relieve pressure from heavy competition and low interest rates.
There have been eight acquisitions of Spanish banks in the last two years, according to data compiled by Bloomberg. The largest was Banco Bilbao Vizcaya Argentaria SA’s purchase of nationalized lender Catalunya Banc SA last year for 1.19 billion euros. CaixaBank agreed to buy Barclays Plc’s banking operations in Spain for about 800 million euros in cash last year.
Citigroup Inc and UBS Group AG advised CaixaBank, while Clifford Chance acted as its legal adviser. Bank of America Corp and Societe Generale SA worked with Criteria, and Allen & Overy was its legal adviser.