UPDATE 5-Bradesco to acquire HSBC Brazil unit, biggest-ever buy

lunes 3 de agosto de 2015 15:49 GYT

* HSBC sells Brazil unit at higher-than-expected price

* Deal helps Bradesco boost presence in high-end segment

* Bradesco preferred shares fall 4 percent

* HSBC struggled with competition, high costs in Brazil (Adds Breakingviews link)

By Guillermo Parra-Bernal and Aluísio Alves

SAO PAULO, Aug 3 (Reuters) - Banco Bradesco SA agreed to buy HSBC Holdings Plc's Brazilian unit for a surprisingly high 17.6 billion reais ($5.2 billion), narrowing the gap with larger rivals while boosting its base of affluent customers in Latin America's largest economy.

The deal between Bradesco and Europe's largest bank includes the latter's Brazilian retail banking and insurance units. The agreement, which still requires regulatory approval and was sealed on July 31, could close by June.

The all-cash acquisition will allow Bradesco to close the asset gap with larger rivals Itaú Unibanco Holding SA and state-controlled banks Banco do Brasil SA and Caixa Econômica Federal. HSBC Brasil's focus on high-income customers fits well into Bradesco's plan to ramp up sales of specialized financial services for the wealthy and larger corporations.

The purchase price, which could change to reflect the net asset value of both businesses, is equivalent to 1.8 times book value, far above what analysts expected and above Bradesco's own valuation. Reuters reported on July 20 that Bradesco had entered exclusive talks with HSBC after offering to pay about 12 billion reais, or 1.2 times book value.   Continuación...