Banco Santander To Buy GE Money Bank For EUR 700 Mln - Update

(RTTNews) - Spanish commercial bank Banco Santander, S.A. (SAN, BNC.L) Monday said its consumer finance unit has agreed to buy GE Money Bank AB, GE Capital's consumer finance business in Sweden, Norway and Denmark, for 700 million euros.

A definitive agreement related to the deal has been signed by Santander Consumer Finance, S.A. and GE Money Nordic Holding AB, or GE Capital. Sweden accounts for 55 percent of GE Money Bank's loans in the region, Norway 26 percent, and and Denmark, 19 percent.

According to Banco Santander, the purchase price of the transaction totaled after a pre-closing dividend to remove excess capital. As per the terms of the agreement, Santander will assume GE Money Bank's intragroup funding.

The deal, which is expected to close in the second half of 2014, will have an impact of 8 basis points in Grupo Santander's core capital.

After the integration of both businesses, Santander Consumer Finance Nordic will represent approximately 17 percent of the unit's loan portfolio. Santander noted that the transaction will enable its Consumer Finance to increase its geographical diversification.

Following the transaction, Santander Consumer Finance Nordic will have over 1.2 million customers in the region and will significantly increase its capacity and growth potential, the firm added.

Emilio Botín, Chairman of Banco Santander said, "The acquisition of GE Capital's business in the Scandinavian countries is an important step in Santander Consumer's growth strategy. It'll increase its geographical diversification and strengthen its position as the leading consumer finance provider in Europe."

The transaction is subject to relevant regulatory approvals.

In April end, Banco Santander had offered to acquire all shares of Banco Santander Brasil not already held by Grupo Santander, representing about 25 percent of Santander Brasil's share capital. The deal is expected to be completed by October.

In Madrid, Banco Santander shares are currently trading at 7.80 euros, down 0.57 percent, on a volume of 24.99 million shares.