Scotiabank has submitted a binding offer to acquire Banco Bilbao Vizcaya Argentaria, S.A.’s (BBVA) shares in BBVA Chile, which BBVA is willing to accept if BBVA’s minority partner, the Said family, does not exercise its Right of First Refusal under the shareholders agreement between BBVA and the Said family, Scotiabank announced.
BBVA owns 68.19 percent of BBVA Chile and the Said family owns 31.62 percent of BBVA Chile. Scotiabank has offered to acquire BBVA’s interests in BBVA Chile, and certain subsidiaries, for approximately $2.2 billion.
This transaction is in line with Scotiabank’s strategy to increase scale within the Chilean banking sector and the Pacific Alliance countries. It will double Scotiabank’s market share in Chile to approximately 14 percent, and make Scotiabank the third largest non-state owned bank in the country.
If the transaction is completed, Scotiabank’s Common Equity Tier 1 capital ratio will be impacted by approximately 100 basis points, the bank said.
Pursuant to the mandatory tender offer for all the shares of BBVA Chile required under Chilean law or the Said family’s tag-along rights under the shareholders agreement of BBVA Chile, the Said family has the right to sell its shares of BBVA Chile on the same basis to Scotiabank.
Scotiabank’s Common Equity Tier 1 capital ratio would be impacted by approximately 135 basis points, if the transaction is completed and the Said family tenders/sells all of its shares to Scotiabank.
In Puerto Rico, BBVA sold its assets to Oriental Financial Group in 2012, pulling out of the island’s banking industry.