SAO PAULO/BRASILIA, Nov 20 (Reuters) - Brazil's state-run
Banco do Brasil agreed to buy a large public bank on Thursday,
spurring further consolidation in the banking sector of Latin
America's largest economy.
Banco do Brasil said it would buy Nossa Caixa, a commercial
bank owned by the state of Sao Paulo, for 5.39 billion reais
($2.25 billion).
Banco do Brasil expects year-end approval from the Sao
Paulo state assembly for a deal it hopes will generate between
2 billion and 4 billion reais in synergies over 5 years.
It will pay 18 cash installments from March 2009 and make a
public offer to buy minority shares in the first half of 2009.
Financial markets were closed for a public holiday, but on
Wednesday, Banco do Brasil shares closed down 0.6 at 13.32
reais and Nossa Caixa shed 0.37 percent to 51.30 reais.
Brazilian newspapers said this week Nossa Caixa's market
value was around 7 billion reais.
Brazil's second-largest private sector bank, Itau, agreed
to buy smaller rival Unibanco earlier this month, creating a
Latin American financial giant.
Brazilian state-run banks have played a key role in recent
government measures to ease a credit crunch that resulted from
the global financial crisis and has begun to diminish domestic
consumer demand.
"This acquisition is positive because private banks are
growing in Brazil," Finance Minister Guido Mantega told
reporters in Brasilia.
"The important thing is that Banco do Brazil be strong," he
said.
President Luiz Inacio Lula da Silva said on Tuesday he
wanted Banco do Brasil to be Brazil's largest bank. Despite the
acquisition it remains No. 2 in terms of assets, based on
corporate data filed with authorities.
Some analysts see room for more mergers and acquisitions
in Brazil.
"The consolidation doesn't end here," said Joao Augusto
Frota Salles, senior analyst at RiskBank consultancy.
The government has authorized Banco do Brasil and Caixa
Economica Federal, also a federal bank, to buy into other
financial institutions to help keep the crisis from spreading.
Banco do Brasil's Chief Executive Antonio Francisco de Lima
Neto said it was interested but had no immediate plans for
further acquisitions.
"We don't have other opportunities at the moment," Neto
told TV Globo.
(Additional reporting by AnaPaula Paiva; Editing by Raymond
Colitt and Brian Moss)
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