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Cencosud SA Announces Binding Agreement with Itau Unibanco Holding SA for Joint Development of Financial Retail Business in Chile and Argentina

Monday, 17 Jun 2013 07:25pm EDT 

Cencosud SA announced it has signed a binding MOU with Itau Unibanco Holding SA (Itau) to jointly develop the financial retail business in Chile and Argentina. Under the terms of the agreement, Itau Chile will acquire 51% of the shares of CencosudAdministradora de Tarjetas (CAT), Cencosud's credit card operator in Chile. In Argentina, Cencosud will create a new entity, in which Itau Argentina will contribute with equity, to jointly develop the business. Additionally, in both countries Itau will provide funding to finance 100% of the current credit portfolio and future growth. The agreement signed today includes all the conditions for the establishment of the new partnership. During the next 90 days, the parties will work to translate these terms into the respective contracts. The final contracts are subject to approval from the regulators both in Chile, Brazil and Argentina. This partnership is aligned with the long-term strategic plan of Cencosud, which aims to enhance the financial services and value proposal offered to Cencosud's clients without the need to devote internal resources, replicating the successful business model currently operating in Brazil and Colombia. Cencosud will receive a total up-front cash payment of approximately USD1,580 million, of which USD280 million will be from the sale of 51% share of CAT and USD1,300 million in the form of payment of the credit card portfolio funding 

Company Quote

0.72 +6.03%
17 Dec 2014