CRITERIA CaixaCorp, the investment company owned by Spain's biggest savings bank, has agreed to buy 20 percent of Carlos Slim's Grupo Financiero Inbursa SA for 1.5 billion euros (US$2.36 billion) to tap economic growth in Mexico.
Criteria will pay 38.5 pesos (US$3.71) a share for the holding, as it takes part in a bigger stock sale by Mexico City-based Inbursa, the Spanish company said yesterday in a filing. According to Bloomberg News, that's a premium of 8.6 percent on Friday's closing price.
The unit of Barcelona-based La Caixa, which holds stakes in businesses worth about 24 billion euros, is buying the stock in Inbursa to diversify into a major Spanish-speaking country as the bank faces the increasing chance of a recession at home.
La Caixa joins Spain's Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA in investing in Mexico, as more workers in the country are escaping poverty and using financial services.
"Getting into Mexico looks like a good option because it's a high-growth market and banking is an area that Criteria should focus on," said Alberto Espelosin, a strategist at Zaragoza, Spain-based Ibercaja Gestion.
The Inbursa stake will also become a vehicle for expansion in the Americas, Criteria said, without giving further details.
The unit is seeking to invest in Asia and central and eastern Europe as well as in Spanish-speaking countries.
Criteria rose 6 cents, or 1.4 percent, to 4.30 euros in Madrid trading.
The Mexican bank was set up in 1984 by Slim, the world's second-richest man after Warren Buffett, according to Forbes magazine. Inbursa has 6.7 million customers, 5,000 staff, more than US$170 billion in assets in custody or under administration, and it earned US$497 million last year, Criteria said.
Inbursa chief executive officer Marco Antonio Slim said in October that the bank would maintain its "aggressive" pace of growth this year after doubling its consumer-credit portfolio in 2007.
Marco Antonio Slim, one of the billionaire's six children, last year introduced a credit card that carries the brand of a Mexican natural-gas distribution company. He predicted the card would add about 100,000 clients in its first year.
The CEO also said in October that it had 6 billion pesos of consumer credit on its books, comprising 9 percent of total loans.
Criteria will be able to name two Inbursa board members under the deal, while the Slim family "will keep the majority of the capital and the management," the Spanish company said.
The transaction, which will be financed with debt, is due to close before the end of the year, the companies said.