Warburg Pincus-led Group To Buy 50% Stake In Santander's Custody Business

(RTTNews) - Grupo Financiero Santander Mexico, S.A.B. de C.V. (BSMX) announced that its parent company, Banco Santander, S.A. has entered into a definitive agreement with FINESP Holdings II B.V, an affiliate of Warburg Pincus, a private equity firm focused on growth investing, to create a leader in the custody business.

As per the terms of the agreement, which is conditional upon legal and regulatory approvals, the group which will also include Temasek, a Singapore based investment company, will acquire a 50% stake in Santander's current custody operations in Spain, Mexico and Brazil. The remaining 50% will be owned by Santander. The transaction is expected to close in the fourth quarter of 2014.

The transaction values Santander's custody operations in these countries at 975 million euros and will generate a net capital gain for the Santander Group of about 410 million euros, which will be used to strengthen the balance sheet.

Santander is a custody provider in Spain, Brazil and Mexico, with 738 billion euros in assets under custody.