Santander to Sell Stake in U.S. Auto Financing Group
>> Friday, October 21, 2011
Spain’s Grupo Santander, the eurozone’s largest bank by market capitalization, announced a $1.15 billion deal on Friday to sell a 35 percent stake in its automotive financing unit in the United States to a group of private equity investors, as it looks to shore up its balance sheet.
Under the terms of the agreement, Kohlberg Kravis Roberts, Centerbridge Partners, and Warburg Pincus will invest a combined $1 billion for a 25 percent share in Santander Consumer USA. Dundon DFS will pay $150 million for a 10 percent stake in Santander Consumer USA.
“Following the transaction, Santander will realize a capital gain of approximately $1 billion,” the Madrid-based bank said in a statement. “The capital gain will be fully allocated to reinforce the Group’s balance sheet.”
According to regulatory filings, Santander’s core tier-1 ratio – a key indicator of a bank’s overall financial health — stood at 7.1 percent in 2010.
Santander, which will retain a majority stake in its U.S. consumer financing division, went on an acquisition binge during the financial crisis.
In 2008, the Spanish bank bought Philadelphia-based Sovereign Bancorp for $1.9 billion. That followed other global deals, including the acquisition of Britain’s Alliance & Leicester for $1.9 billion and Brazil’s Banco Real for $1 billion.
Yet the deteriorating economic situation in its home market has begun to take its toll. According to the European Union, more than one in five of all Spaniards is currently unemployed.
Source: http://dealbook.nytimes.com/2011/10/21/santander-to-sell-stake-in-u-s-auto-financing-group/
Under the terms of the agreement, Kohlberg Kravis Roberts, Centerbridge Partners, and Warburg Pincus will invest a combined $1 billion for a 25 percent share in Santander Consumer USA. Dundon DFS will pay $150 million for a 10 percent stake in Santander Consumer USA.
“Following the transaction, Santander will realize a capital gain of approximately $1 billion,” the Madrid-based bank said in a statement. “The capital gain will be fully allocated to reinforce the Group’s balance sheet.”
According to regulatory filings, Santander’s core tier-1 ratio – a key indicator of a bank’s overall financial health — stood at 7.1 percent in 2010.
Santander, which will retain a majority stake in its U.S. consumer financing division, went on an acquisition binge during the financial crisis.
In 2008, the Spanish bank bought Philadelphia-based Sovereign Bancorp for $1.9 billion. That followed other global deals, including the acquisition of Britain’s Alliance & Leicester for $1.9 billion and Brazil’s Banco Real for $1 billion.
Yet the deteriorating economic situation in its home market has begun to take its toll. According to the European Union, more than one in five of all Spaniards is currently unemployed.
Source: http://dealbook.nytimes.com/2011/10/21/santander-to-sell-stake-in-u-s-auto-financing-group/
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