By Guillermo Parra-Bernal, Felipe Iturrieta and Aluísio
SAO PAULO/SANTIAGO Jan 28 Itaú Unibanco Holding
SA, Latin American's largest bank by market value, and Chilean
lender CorpBanca SA could announce a partnership as
early as Wednesday, sources with direct knowledge of the
situation told Reuters.
São Paulo-based Itaú and CorpBanca, controlled by
billionaire Alvaro Saieh, would create a new company and merge
assets in Chile and Colombia, according to two of the sources,
who declined to be identified because the deal has not been
Under the terms of the deal, Itaú would control 50.5 percent
of the new company, said one source. In recent years Itaú has
resorted to partnerships, such as the payroll lending venture
with Banco BMG SA and an insurance joint operation
with Porto Seguro SA, to avoid the difficulties that
might crop up from a full combination.
For Itaú, an association with CorpBanca would not only open
a significant window of opportunity into retail banking in
Chile, but also provide a platform to grow in Colombia, South
America's fastest-growing economy last year.
Both banks declined to comment.
For years Setubal sought to buy regional rivals, but backed
off due to high valuations. Itaú began operations in Chile with
the purchase of Fleet Boston Corp's local unit in 2006 and later
HSBC Holdings Plc's operations in 2011.
Itaú and Santiago-based CorpBanca, Chile's fifth-largest
bank and which also operates in Colombia, recently confirmed
they were in acquisitions talks. As part of the deal, Itaú could
inject cash and equity into the new company, one source said,
with CorpBanca basically entering the deal with its assets.
The new company could become the Andean nation's No. 3
lender by assets, leap-frogging Banco del Estado de Chile SA
and Banco de Credito & Inversiones SA. Itaú
has a fast-growing wholesale banking operation in Colombia.
HISTORY OF BUYING, SELLING
None of the sources gave details, such as the value of the
transaction. Shares of CorpBanca shed 1.3 percent to 7.1 pesos
on Tuesday, valuing the company at about $4.4 billion. Itaú rose
for a second day, adding 0.8 percent to 30.08 reais.
Saieh, CorpBanca's controlling shareholder, began talks in
November with Itaú and other lenders to pursue a merger, an
outright sale, or creation of a structure allowing him to remain
a relevant shareholder in CorpBanca, sources told Reuters in
Investors expected CorpBanca to finish integrating two banks
it bought in Colombia before attempting a combination.
Apart from Itaú, Spain's Banco Bilbao Vizcaya Argentaria SA
and Canada's Bank of Nova Scotia were also
interested in the Chilean bank, sources said at the time.
Colombia-born Saieh, who holds a doctorate in economics from
the University of Chicago, has a history of buying and selling
financial assets. He sold a small bank to Banco Santander SA
in 1996 and pension and retail banking assets in
Argentina to BBVA three years later.
He has struggled in recent times with his SMU retail unit,
which runs Unimarc, one of Chile's largest supermarket chains.
Last August, SMU uncovered accounting errors in a review of
first-quarter earnings, raising its liabilities and leading it
to breach debt covenants.