UPDATE 1-Santander Brasil hopes to seal GetNet buyout next quarter

miércoles 19 de marzo de 2014 12:59 GYT

(New throughout, adds GetNet talks, comments, updates share performance)

By Guillermo Parra-Bernal

SAO PAULO, March 19 (Reuters) - Banco Santander Brasil SA expects to conclude the buyout of card payment processor GetNet Tecnologia SA in the second quarter, a senior executive said on Wednesday, a move that should boost the footprint of Brazil's largest foreign lender in a fast-growing sector.

The São Paulo-based lender and Ernesto Corrêa da Silva, GetNet's controlling shareholder, are finalizing details of the deal, with the most important aspects already agreed upon, said Conrado Engel, Santander Brasil's executive president for retail banking. He declined to elaborate on the value and other terms of the deal.

Both parties began discussions in July over the purchase of Corrêa's stake in GetNet, a financial institution known as a merchant acquirer in Brazil, which processes credit or debit card payments for merchants and also deals with receivables and payments from card-issuing banks.

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

"Certainly that deal will be concluded during the second quarter, I have no doubt about it," Engel said on the sidelines of a Santander Brasil event with shareholders. "All this is happening - the timetable, the talks - as expected."

Santander Brasil recently divested fee income-earnings 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 to win market share in merchant acquiring, which has grown at compounded average growth rates close to 20 percent in the past five years.

Analysts have said that Santander Brasil is likely to pay a fat premium to buy out Corrêa, since GetNet's contribution to the lender's earnings is larger than the stake Santander Brasil owns in the unit. GetNet is also a key tool in Santander Brasil's intention to grow in retail banking, which has struggled in the wake of aggressive competition from state-run banks and a jump in defaults in recent years.   Continuación...