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SANTIAGO, June 20 Bank of Nova Scotia
said on Friday it has agreed to purchase a 51 percent
majority stake in Latin American retailer Cencosud's
retail credit card business in Chile for $280 million.
The Canadian bank and its local unit, Scotiabank Chile
, will also finance all of the retailer's credit card
portfolio in Chile for around $1 billion, according to the terms
of the agreement, which also call for the business arrangement
between the retailer and bank to last 15 years.
The acquisition "will strengthen our credit card offerings
for our customers and attract new customers to the bank," Wendy
Hannam, Scotiabank's executive vice president for Latin America,
said in a statement.
Scotiabank, Canada's third-largest bank, is active in more
than 55 countries and has said Chile is one of four Latin
American countries it is focusing on for growth. The others are
Mexico, Colombia and Peru.
The deal could help Cencosud reduce its debt levels,
something the retailer's chief executive said in April the
company would focus on in order to keep its investment-grade
"This business association is part of Cencosud's long-term
strategy, which aims to boost the financial services it offers
clients without having to use its own resources," the retailer
said in a separate statement.
Regulators in Canada and Chile need to approve the deal,
which Cencosud said should be completed by year-end.
A previous deal between Cencosud and Brazil's largest
private-sector bank, Itau Unibanco Holding SA, to
sell a 51 percent stake in the retailer's credit card business
in Chile and Argentina for $307 million fell through last year.
Cencosud - the owner of brands such as supermarket chain
Jumbo, home improvement chain Easy, and the Paris department
stores, as well as commercial centers - operates in Argentina,
Brazil, Chile, Colombia and Peru.
(Reporting by Anthony Esposito and Antonio de la Jara,
additional reporting by Cameron French in Toronto, writing by
Anthony Esposito; editing by Chris Reese and G Crosse)