Boston, MA 04/16/2014 (wallstreetpr) – Banco Santander Brasil SA (ADR) (NYSE:BSBR), a Brazil-based bank with $21 billion in market cap, seeks to expand its market share in Brazil’s banking and financial space. Although the company, recently divested several of its businesses namely asset management and insurance, the desire to gain greater control of the market is leading it back to making an acquisition.
The company announced the acquisition of the card payment company GetNet Technologia SA. Banco Santander agreed to pay 1.1 billion reais or $493 million to take 88.5 percent control of the card processor. Launched about four years ago, GetNet controls about 6 percent of the Brazilian card processing market. According to Banco Santander, the business has the potential of gaining more than 10 percent market share over the next few years.
The growth of GetNet was largely supported by the company’s ability to exploit the market weaknesses of Brazil’s dominant card payment processors Cielo and Redecard, which are controlled by Banco do Brasil and Itau Unibanco Holding respectively. The two dominant card processors alone control more than 90 percent of the market share. However, in taking over majority control in GetNet, Banco Santander Brasil SA (ADR) (NYSE:BSBR) expects to give the bigger rivals a run for their money in the control of the lucrative Brazilian card payment processing market.
Indirect ownership
Banco Santander Brasil SA (ADR) (NYSE:BSBR) announced that GetNet will be owned, at 88.5 percent, by its local unit that already operates card processing business.
In acquiring a majority stake in GetNet, Banco Santander purchased additional stake from Ernesto Corrêa da Silva that had controlling position in the card processor. Talks between Ernesto and Banco Santander over the acquisition of GetNet started last July.
Revenue increase
Banco Santander Brasil SA (ADR) (NYSE:BSBR) expects its acquisition of GetNet to boost revenue. It expects to incorporate the operations of GetNet into its 2014 fourth quarter earnings, or in the 2015 first quarter earnings. Banco Santander is owned by Santander SA of Spain.
