Mexican banking concern Grupo Financiero Banorte SAB said Wednesday it has reached an agreement to acquire Grupo Financiero Interacciones SAB in a cash-and-stock deal that will make Banorte the second-largest bank in Mexico by assets, loans and deposits.
Banorte said in a filing with the Mexican stock exchange that Interacciones shareholders will receive 13.7 billion Mexican pesos ($719 million) in cash and 109.7 million new Banorte shares, equivalent to about 4% of Banorte's equity.
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Banorte shares closed down 9.3% on the Mexican stock exchange at 106.18 pesos ($5.58). Interacciones shares rose 0.6% to 104.90 pesos.
The transaction requires shareholder and regulatory approvals, and is expected to close in the second quarter of 2018, Banorte said.
Banorte said it is Mexico's third-largest bank by loans and assets, and fourth by deposits. It operates banking, pension and brokerage services, among others, and said it expects to merge Interacciones units with its own corresponding units.
Interacciones said it will bring its expertise in infrastructure financing and government loans to Banorte's consumer banking platform, diversifying sources of revenue, creating economies of scale and improving margins.
The idea of merging the two groups isn't new. Such a move had been rumored and denied in 2014, when current Banorte Chairman Carlos Hank González resigned as Interacciones chief executive to join the board of the larger bank.
Mr. Hank is the grandson of Roberto González Barrera, the former chairman of Banorte who acquired the regional bank in a 1992 privatization and expanded it into one of Mexico's largest financial institutions.
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(END) Dow Jones Newswires
October 25, 2017 18:07 ET (22:07 GMT)