Santander sells 50% of its custody business
Banco Santander has entered into a definitive agreement with Finesp Holdings, an affiliate of global private equity firm Warburg Pincus to create a leader in the custody business.
Under the terms of the agreement, which is conditional upon legal and regulatory approvals, the group which will also include Temasek, a Singapore based investment company, will acquire a 50% stake in Santander’s current custody operations in Spain, Mexico and Brazil. The remaining 50% will be owned by Santander. The transaction is expected to close in the fourth quarter of 2014.
Santander is a leading custody provider in Spain, Brazil and Mexico, with €738bn in assets under custody. The transaction values Santander’s custody operations in these countries at €975m and will generate a net capital gain for the Santander Group of approximately €410m, which will be used to strengthen the balance sheet.
The company will focus on enhancing the products and services provided to its customers through greater investment in its technology platform and team.
Warburg Pincus is a global private equity firm focused on growth investing with more than $37bn assets under management. The firm has a long standing successful track record in financial services investing, and has previously partnered with Banco Santander to jointly build best-in-class businesses.
Incorporated in 1974, Temasek is an investment company based in Singapore. Supported by 11 offices globally, Temasek owns a $215bn portfolio as at 31 March 2013, with 71% of its underlying assets in Asia (including Singapore), and 25% in the mature economies of North America, Europe, Australia & New Zealand. Around 2% of the portfolio is held in Latin America.
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