Santander sells 50 percent stake in asset management arm
MADRID (Reuters) - Spain's biggest bank, Santander (SAN.MC), has reached a deal with U.S. private equity firms Warburg Pincus WP.UL and General Atlantic LLC to sell them a 50 percent stake in its asset management arm.
Santander said in a statement on Thursday announcing the sale that it would book a 700 million euro ($914 million) net profit from the deal, which valued Santander Asset Management at 2.05 billion euros.
For Santander, the sale provides financial backers to expand its asset management business outside of Europe and Latin America, where most of its 152 billion euros of assets currently under management are located.
The bank said it now hoped to double these assets in the next five years and play an active part in consolidation of the sector to compete with the world's biggest asset managers.
Three sources told Reuters last month that Santander had been looking to bulk up or sell its asset management arm for several years. The business was first put on the block in 2008.
For Warburg Pincus and General Atlantic, the addition of Santander Asset Management to their portfolios further increases their investments in financial services.
Warburg Pincus in October 2011 led a $1 billion investment in Banco Santander's Santander Consumer USA (SCUSA), a U.S. automotive finance lending business.
In April 2010, Warburg purchased shares of Primerica (PRI.N), a distributor of financial products to middle-income households in North America, from Citigroup (C.N) as part of Primerica's spin-off via an initial public offering.
Similarly General Atlantic Partners has a history of investing in financial services companies, such as First Republic Bank (FRC.N), a San Francisco-based private bank and wealth management firm, and online brokerage E*Trade Financial EFTC.O.
Half of its portfolio of more than 50 companies are from outside the United States. In February, General Atlantic announced a plan to invest $171 million in a minority stake in XP Investimentos, a Brazilian brokerage firm.