On Wednesday, Mexican companies Banorte and Interacciones announced a merger that will create the second-largest financial group in the country, in a transaction worth 27.4 billion pesos ($1.439 billion).
As part of the agreement, Interacciones shareholders will receive more than 13.712 billion pesos and the remainder through 109.7 million Banorte shares, corresponding to the exchange of all shares representing the capital stock of the group specializing in financing governments and infrastructure.
To complete the transaction, Banorte will issue additional securities representing approximately 4% of the total securities currently in circulation.
The transaction is expected to be completed in the second quarter of next year.
Banorte’s shares fell to their lowest level in more than five months and closed down 9.29% on the Mexican Stock Exchange at the end of trading on Wednesday.
Interacciones, for its part, is one of the main lenders to state and municipal governments.
The move still needs to be approved by the Federal Economic Competition Commission (Cofece).
The companies said that as a result of the transaction, Banorte will become the country’s second-largest financial group in terms of total assets, loan portfolio, and deposits, as well as operating the largest bank owned by Mexican investors and the country’s largest pension fund.
The current president of Banorte, Carlos Hank González, is the son of the chairman of the board of Grupo Financiero Interacciones, Carlos Hank Rhon.
Interacciones was founded in 1987 as a brokerage firm and in 1993 became another financial group in the country. Banorte was founded in 1899 in Monterrey.
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