By Joanne Bladd
The $2.7bn deal marks state-backed fund's move into Latin American market
Qatar Holding, a direct investment vehicle for the Gulf state, on Monday announced it had acquired a five percent stake in Banco Santander’s Brazilian unit, a transaction valued at $2.7bn.
Spain's largest financial group will sell Qatar Holding mandatory convertible bonds equivalent to five percent of the share capital of Banco Santander Brazil, the Gulf fund said in an emailed statement.
The exchange price for the three-year bonds will be 23.75 reais ($14.22) per share.
The bonds pay an annual coupon of 6.75 percent, Santander said. The sale will allow Santander’s Brazil unit to achieve its commitment of having a free float in the stock market of 25 percent by the end of 2014, the bank said.
Closing of the transaction is expected to take place by the end of October, 2010. Barclays Capital is acting as exclusive financial adviser to Qatar Holding.
Commenting on the deal, Hussain Ali Al-Abdulla, vice chairman of Qatar Holding, said: “This acquisition accomplishes our objective of increasing our exposure to fast-growing emerging markets like Brazil, after our earlier investment in China during the summer. This will further diversify our portfolio’s geographical coverage, this time to Latin America.”