Itau and Unibanco Announce Joint Venture
03 November 2008 - 3:38PM
PR Newswire (US)
ITA�SA, BANCO ITA� HOLDING FINANCEIRA, UNIBANCO HOLDINGS, UNIBANCO
EXECUTIVE SUMMARY SAO PAULO, Nov. 3 /PRNewswire-FirstCall/ -- The
controlling shareholders of Itausa and Unibanco Holdings announce
to the market that a joint venture agreement was executed today to
merge the financial operations of Itau and Unibanco, establishing
the largest private financial conglomerate in the Southern
Hemisphere, with a market capitalization among the top 20 in the
world. The new financial institution will have the ability to
compete in the international arena with the largest world banks.
The joint venture provides for a corporate restructuring that will
cause the migration of current shareholders of Unibanco Holdings
S.A. ("Unibanco Holdings") and Unibanco - Uniao de Bancos
Brasileiros S.A. ("Unibanco") to a publicly listed company to be
called Itau Unibanco Holding S.A., which is currently Banco Itau
Holding Financeira S.A. ("Itau Unibanco Holding"), which will be
made through a merger of shares ("incorporacao de acoes"). Itau
Unibanco Holding will have Itausa - Investimentos Itau S.A and the
controlling shareholders of Unibanco Holdings, with control to be
exerted by means of a non-financial institution to be incorporated
for the purpose of this transaction. Unibanco and Unibanco
Holdings' common shares currently held by its non-controlling
shareholders will be exchanged into common shares issued by Itau
Unibanco Holding, following the same exchange rate negotiated by
the Parties for the exchange of the common shares held by the
controlling shareholders of Unibanco Holdings. For the preferred
shares, the exchange rate was calculated based on the market
average of price of the Units (share certificates representing one
preferred share of Unibanco and one preferred share of Unibanco
Holdings) and of the preferred shares of Banco Itau Holding
Financeira S.A. in the last 45 sessions of the Brazilian Stock
Exchange - Bovespa. Both the Units and the preferred shares of
Banco Itau Holding Financeira S.A. are part of the IBX-50 and the
Ibovespa, and are also traded on the New York Stock Exchange.
NUMBER OF SHARES OF UNIBANCO AND OF UNIBANCO HOLDINGS TO BE
EXCHANGED FOR EACH SHARE OF ITAU UNIBANCO HOLDING: Security
Exchange Rate ON UNIBANCO (UBBR3) 1,1797=1 ON UNIBANCO HOLDINGS
(UBHD3) 1,1797=1 UNIT (UBBR11) 1,7391=1 PN UNIBANCO (UBBR4)
3,4782=1 PN UNIBANCO HOLDINGS (UBHD6) 3,4782=1 GDRs (UBB) 0,17391=1
The conclusion of the corporate restructuring herein described
shall depend on the approval of the Central Bank of Brazil and of
other relevant authorities. This transaction will result in a
Brazilian bank with the commitment, strength and economic
capability necessary to transform it into a vital agent to the
development of national companies and of Brazil. DETAILS OF THE
TRANSACTION The controlling shareholders of Itausa and of Unibanco
Holdings hereby announce to the market that they have, as the
result of the negotiations established under secrecy through the
last fifteen months, executed today a joint venture agreement
aiming at the unification of the financial operations of Itau and
Unibanco, envisioning the biggest private financial group of the
Southern Hemisphere, with a market capitalization among the top 20
in the world. The new financial institution will have the ability
to compete in the international arena with the largest world banks.
The joint venture provides for a corporate restructuring, that will
cause the migration of current shareholders of Unibanco Holdings
S.A. ("Unibanco Holdings") and Unibanco - Uniao de Bancos
Brasileiros S.A. ("Unibanco") to a publicly listed company to be
called Itau Unibanco Holding S.A., which is currently Banco Itau
Holding Financeira S.A. ("Itau Unibanco Holding"), which will be
made through a merger of shares ("incorporacao de acoes"). Itau
Unibanco Holding will have Itausa - Investimentos Itau S.A and the
Moreira Salles family as its controlling shareholders, with control
to be exerted by means of a non-financial institution to be
incorporated for the purpose of this transaction. Itau and Unibanco
understand that with this joint venture they will be able to offer
the best products and services in the Brazilian market for their
millions of corporate and individual clients. Itau Unibanco Holding
brings together their remarkable complementary aspects. 1. PURPOSE
Stockholders' Equity of approximately 51.7 billion Reais (09.30.08)
and a net profit of 8.1 billion Reais up to September 2008 ensure a
relevant capital base for Itau Unibanco Holding, preparing it for:
-- strengthening the support to Brazilian companies and their
national and international operations; -- expanding its business in
Brazil; -- supporting the growth of the credit transaction of our
clients; -- competing in the international market; -- substantially
increasing economic scale gains in all client segments; --
substantial synergies in various business. One of the competitive
differentials of Itau and Unibanco is the internal segmentation
strategy of the businesses, which allows a better identification of
the necessities of each class of clients, the creation of specific
banking products and services and the optimization of the use of
each potential segment, providing a broad range of banking products
and services for a diversified base formed by individual and
corporate clients. Itau Unibanco Holding will increase the
potential of this segmented culture. 2. CORPORATE STRUCTURE Before
the conclusion of the corporate restructuring, Itausa will transfer
Banco Itau Holding Financeira S.A. its shares of Banco Itau Europa
S.A. for approximately R$1.2 billion, with R$550 million by means
of the issuance of common shares of Banco Itau Holding Financeira
S.A. (21 million of shares) and the remaining amount paid in cash.
This transaction will not impact the exchange rate provided by item
3.1. The chart at
http://www.prnewswire.com.br/arq/Summarizes_Itau.jpg summarizes the
current situation and the result of this transaction. Itau Unibanco
Holding will be controlled by IU Participacoes S.A., according to
the chart at the web site above. 3. EXCHANGE RATES OF SHARES 3.1.
Exchange Rate of Shares Unibanco and Unibanco Holdings' common
shares currently held by its non-controlling shareholders will be
exchanged into common shares issued by Itau Unibanco Holding,
following the same exchange rate negotiated by the Parties for the
exchange of the common shares held by the controlling shareholders
of Unibanco Holdings. For the preferred shares, the exchange rate
was calculated based on the market average of price of the Units
(share certificates representing one preferred share of Unibanco
and one preferred share of Unibanco Holdings) and of the preferred
shares of Banco Itau Holding Financeira S.A. in the last 45
sessions of the Brazilian Stock Exchange - Bovespa. Both the Units
and the preferred shares of Banco Itau Holding Financeira S.A. are
part of the IBX-50 and the Ibovespa, and are also traded on the New
York Stock Exchange. NUMBER OF SHARES OF UNIBANCO AND OF UNIBANCO
HOLDINGS TO BE EXCHANGED FOR EACH SHARE OF ITAU UNIBANCO HOLDING
Security Exchange Rate ON UNIBANCO (UBBR3) 1,1797=1 ON UNIBANCO
HOLDINGS (UBHD3) 1,1797=1 UNIT (UBBR11) 1,7391=1 PN UNIBANCO
(UBBR4) 3,4782=1 PN UNIBANCO HOLDINGS (UBHD6) 3,4782=1 GDRs (UBB)
0,17391=1 The amount of shares held, directly and indirectly by
Itausa, at the end of this transaction will be increased by 8.3%.
The issuance of common and preferred shares will amount 1,120,896
thousand shares, which is equivalent to 27.4% of the total amount
of shares of Itau Unibanco Holding. 3.2. Negotiation Between the
date of the Extraordinary Shareholder Meeting, which will decide on
the corporate restructuring, and the date of the approval of the
transaction by the Central Bank of Brazil, the shares of Itau and
Unibanco will be negotiated as usual, both on the BOVESPA and the
New York Stock Exchange. 3.3. Shareholders' Rights In the same
period mentioned in item 3.2, the payment of the dividends and
interest on capital stock to the shareholders will continue to be
made by Itau and Unibanco, individually. 4. CORPORATE GOVERNANCE
The Board of Directors of Itau Unibanco Holding will be composed of
fourteen members, of which six will be appointed by the controlling
shareholders of Itausa and the Moreira Salles family. The remaining
eight members will be independent Directors. Mr. Pedro Moreira
Salles will be the Chairman of the Board of Directors and Mr.
Roberto Egydio Setubal will be the Chief Executive Officer of Itau
Unibanco Holding. A Transition Committee will be created at Itau
Unibanco Holding to assure an efficient transition, and will
determine the mechanics and timetable of the integration of Itau
and Unibanco's operations. There will be no changes in the
operations and transactions conducted with clients, creditors and
suppliers. Itau and Unibanco will continue to operate in Brazil and
abroad under the same terms that operations are currently
conducted. 5. MAIN INFORMATION ON THE TRANSACTION The joint venture
will result in a notable increase of the consolidated figures, as
follows: R$ Billion September 30, 2008 Itau Unibanco Itau Unibanco
Holding Assets 396.6 178.5 575.1 Total Loans (without sureties and
endorsements) 151.0 74.3 225.3 Deposits + Debentures(a) 162.7 72.4
235.1 Stockholders' Equity 32.1(b) 12.9 51.7(c) Accumulated Net
Income (January through September) 5.9 2.2 8.1 ROE (on average
Equity) 26.3% 24.4% - Assets under Management (AUM) 209.4 55.6
265.0 Market Capitalization(d) 69.1 18.8 - (a) Does not include
inter-banking deposits. (b) Includes the transfer of Banco Itau
Europa pursuant to item 2 above. (c) Considering the tax effects.
(d) Based on the closing price of UBBR11 and ITAU4 as of October
31, 2008. 5.1. Stockholders' Equity Itau Unibanco Holding's
stockholders' equity will be approximately R$ 51.7 billion,
becoming the financial conglomerate with major capital base in
Brazil (as of September 30, 2008). In the event the joint venture
would be in place in the third quarter, the BIS ratio would be
15.1%, considering the tax effects. A positive impact in the
consolidated net income is estimated as soon as the transaction is
implemented. 5.2. Regulatory Authorities The implementation of the
joint venture set forth herein depends on the approval of the
Central Bank of Brazil and of remaining applicable authorities.
5.3. Shareholders' Meetings The Shareholders' Meetings that will
approve the necessary mergers for implementation of the joint
venture will take place between the last week of November and the
first week of December, based on the appraisal reports to be
prepared pursuant to book and market values by recognized
companies. 6. ACCOUNTING EFFECTS Considering the capital increase
related to the merger of shares ("incorporacao de acoes"), the
variation of its equity share, and the accounting and tax effects,
the positive net effect estimated in the results of Itau Unibanco
Holding will be equivalent to R$7.9 billion and that of Itausa will
be R$ 2.5 billion. 7. CONFIDENCE IN THE FUTURE OF BRAZIL With this
joint venture, Itau and Unibanco reaffirm their confidence in the
future of Brazil, especially in this moment of important challenges
in the economic environment and in the global financial markets.
Investor Relations Officers Roberto Setubal Itausa - Investimentos
Itau S.A. Alfredo Setubal Banco Itau Holding Financeira S.A.
Geraldo Travaglia Unibanco Holdings S.A. Geraldo Travaglia Unibanco
- Uniao de Bancos Brasileiros S.A. DATASOURCE: Banco Itau Holding
Financeira CONTACT: Geraldo Soares, Banco Itau Holding Financeira,
+55-11-5019- 1549, Web site: http://www.itau.com/
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