Banorte Agrees to Buy Interacciones in $1.4 Billion DealBy and
Cash and stock deal to create second biggest lender in Mexico
Announcement confirms years of speculation about merger
Grupo Financiero Banorte SAB agreed to acquire Grupo Financiero Interacciones SA, the bank controlled by Mexican billionaire Carlos Hank Rhon, in a deal that will create Mexico’s second largest bank and a behemoth in infrastructure lending.
Banorte will pay about $1.4 billion in a deal split 50-50 between stock and cash for Interacciones, according to a statement Wednesday. The deal still needs to be approved by regulators and shareholders of both banks.
Shares of Banorte fell 9.3 percent to 106.18 pesos in Mexico, the biggest slump since 2009, while Interacciones added 0.6 percent to 104.90 pesos.
"With this deal, Banorte positions itself as a leader in the financing of the enormous infrastructure necessities of our country, which represents a unique opportunity to propel competitiveness, attract investment and improve quality of life for Mexican families," said Marcos Ramirez Miguel, chief executive officer of Banorte.
The lenders, which both have ties to the powerful Hank family, have been rumored to be in talks for a tie-up since at least 2014. Carlos Hank Rhon, a businessman involved in banking, construction and heavy industry, is the chairman of Interacciones. His son, Carlos Hank Gonzalez, used to be the CEO of Interacciones but joined the board of Banorte in 2014. Hank Gonzalez’s maternal grandfather meanwhile was Banorte’s chairman from 1992 to 2011.
The merger, which is expected to close in the second quarter of next year, would position Banorte as the largest infrastructure lender in Mexico and the second largest bank in the country by loans outstanding, just behind leader BBVA Bancomer SA and above Citibanamex.
Mexico City-based Milenio newspaper reported earlier Wednesday that a merger would be announced imminently.
Bank of America Corp. and Morgan Stanley acted as Banorte’s financial adviser on the deal, while its legal counsel was White & Case. Vace Partners advised Interacciones while Barclays Plc. provided the fairness opinion.
— With assistance by Eduardo Thomson