|Santander to Buy GE Mexico Mortgages for $162 Million|
Crayton Harrison - Bloomberg
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December 27, 2010
Banco Santander SA said its Mexican unit agreed to pay 2 billion pesos ($162 million) for the mortgage operations of General Electric Co. to become that country’s second-largest home lender.
Santander will gain a portfolio of about 24 billion pesos in the deal, which will be completed in the first half of 2011, the Madrid-based bank said today in a statement to Mexico’s stock exchange. Santander agreed to pay undisclosed financing costs, according to the statement.
Santander is expanding in Latin America’s second-largest economy after agreeing in June to pay $2.5 billion to buy back the stake in its Mexican unit that it had sold to Bank of America Corp. in 2003. GE Chief Executive Officer Jeffrey Immelt has sold units including plastic and reinsurance to streamline the Fairfield, Connecticut-based company, the world’s biggest maker of jet engines, power-plant turbines and locomotives.
“This sale is consistent with our strategy to exit non- strategic businesses that lack scale to help reduce GE Capital’s balance sheet while investing in core industrial and commercial finance platforms, including in Mexico,” said Mark Begor, CEO of GE Capital, Restructuring Operations, in a statement.
Santander had about 34 billion pesos in home loans at the end of October, putting it fifth in Mexico behind BBVA Bancomer SA, Grupo Financiero Banorte SAB, Citigroup Inc.’s Banamex unit and Bank of Nova Scotia, according to government data.
Editors: Dan Kraut, Steve Walsh
To contact the reporter on this story: Crayton Harrison in Mexico City at tharrison(at)bloomberg.net
To contact the editor responsible for this story: Peter Elstrom at pelstrom(at)bloomberg.net