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The transaction is subject to certain regulatory approvals and other customary conditions, and the parties anticipate closing by the end of 2010.
“This is a good deal for GE, and furthers our objective of reducing the overall size of GE Capital,” said Dmitri Stockton, president and CEO of GE Capital Global Banking. “We have enjoyed working with BAC’s shareholders and their world-class management team to successfully grow the franchise over the previous five years. We believe this transaction will be positive for BAC, and will allow the Bank to focus solely on its excellent prospects for future growth.”
Founded in 1952, BAC International Bank has operations in Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama and Mexico, with approximately $5.1 billion in loan assets, and $5.5 billion in deposits. GE was advised in the transaction by Credit Suisse, and Latham & Watkins served as external counsel.
This purchase would represent the entry of Aval Group into the wider Central American market. It is currently only present in Panama through subsidiaries of two Colombian banks, Corficolombiana and Banco de Bogotá.
More on this topic
June 2010
Juan Carlos Sansón, general manager of BAC-Credomatic, stated that GE’s sale of BAC-Credomatic shares is “nothing but a rumor”.
He told newspaper La Prensa that they don’t have any official information confirming that General Electric intends to sell Bac-Credomatic. He did acknowledge, however, that GE intends to reduce its participation in the financial market.
June 2010
One of the potential buyers of General Eletric’s shares in BAC-Credomatic is Colombia’s Grupo Aval.
The transnational corporation intends to sell its Latin American financial arm, as part of its efforts to reduce its global banking division.
Reuters reported that a GE could net as much as $1.5 billion for its stake in BAC-Credomatic.
July 2010
Luis Carlos Sarmiento Angulo, one of the richest men on earth, is the owner of Grupo Aval, which controls some of the largest banks in Colombia.
Grupo Aval agreed to purchase 100% of the shares of BAC-Credomatic from GE Capital for $1.9 billion. Currently, GE owns 75% of BAC-Credomatic and agreed to buy the remaining 25% to sell it to Grupo Aval.
October 2010
Grupo Aval would finalize the purchase this year, once it has authorizations from regulatory agencies.
The announcement was made by the president of Banco de Bogota (part of Grupo Aval), Germain Salazar.
Larepublica.com.co reports, "in order to get the resources for this transaction, which will be of 1,900 million dollars, Banco de Bogota announced the issuance of 2.200 million pesos in bonds convertible into shares ($ 1,220 million Dollars)."
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