April 7, 2014 / 6:45 PM / in 5 years

Banco Santander Brasil to buy card firm GetNet

SAO PAULO/MADRID (Reuters) - Banco Santander Brasil SA (SANB11.SA) agreed to acquire Brazil card payment processor GetNet Tecnologia SA for about 1.1 billion reais ($493 million) in a step aimed at gaining market share.

A woman walks past Santander bank branch in Rio de Janeiro October 7, 2009. REUTERS/Sergio Moraes

Banco Santander Brasil and its parent company, Spain’s Santander SA (SAN.MC), announced the deal in separate securities filings on Monday. The Spanish announcement listed the value of the transaction at 353 million euros.

GetNet will be owned by Santander Brasil’s own local card processing unit, giving it an 88.5-percent indirect stake in GetNet, according to the securities filings.

São Paulo-based Santander Brasil and Ernesto Corrêa da Silva, GetNet’s controlling shareholder, began discussions in July over the purchase of Corrêa’s stake in GetNet, which processes credit or debit card payments for merchants and deals with receivables and payments from card-issuing banks, a business called merchant acquiring.

GetNet controls about 6 percent of Brazil’s $300 billion card payment processing industry. Larger rivals Banco do Brasil SA (BBAS3.SA), Itaú Unibanco Holding SA (ITUB4.SA) and Banco Bradesco SA (BBDC4.SA) control a combined 90 percent of the market directly or indirectly through merchant-acquiring units.

The bank expects to integrate GetNet’s operations into quarterly earnings either in the fourth quarter of this year or the first quarter of 2015, said Pedro Coutinho, Santander Brasil’s senior vice president of business development, on a conference call to discuss the deal on Monday.

Santander Brasil recently divested fee income business lines such as insurance and asset management, and the decision to integrate GetNet into its platform marks a step back from this strategy. It also underscores the bank’s goal of winning market share in merchant acquiring, which has grown at compounded average growth rates close to 20 percent in the past five years.

Units of Santander Brasil (SANB11.SA) rose 3.41 percent to 13.03 reais on Monday. The units, a blend of Santander Brasil’s common and preferred shares, are up about 5 percent over the past 12 months.

($1 = 2.23 Brazilian reais)

(1 euro = 3.05 Brazilian reais)

Additional reporting by Alberto Alerigi Jr. and Guillermo Parra-Bernal; Editing by David Gregorio

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