Citigroup has agreed to sell its Brazilian nonbanking credit card and consumer finance unit to São Paulo–based Itaú Unibanco in a cash deal worth $1.38 billion.
Announced Wednesday, the deal would see Itaú Unibanco acquire Citi’s Credicard unit, which includes 96 Credicard stores, as well as credit card and personal loan portfolios. The operation manages roughly $3.26 billion in loan balances. Itaú Unibanco, Brazil’s largest bank by market value, will increase its share of the country’s credit card market from 30 to 40 percent with the acquisition of Credicard—a unit the bank helped found with Citigroup and in which Itaú Unibanco remained a partner until 2006—according to The Financial Times.
Francisco Aristeguieta, CEO of Citi Latin America said in a statement that Brazil remains "an essential part of Citi’s Latin American footprint and global network." The financial services giant expects the sale to result in nearly $300 million in after-tax gains once the deal closes.
Cleary Gottlieb Steen & Hamilton corporate partner Francesca Odell led a New York–based team from that firm serving as international counsel to Itaú Unibanco on the transaction. Tax partner Jason Factor, executive compensation counsel Kathleen Emberger, and intellectual property counsel Daniel Ilan and Emmanuel Ronco also advised on the deal. The Cleary associates working on the matter are Samuel Bryant, David Fisher, Daniel Forester, Suneela Jain, Daniel Malech, and Robin Swartout.
Cleary represented Citigroup and Itaú Unibanco’s predecessor companies, Banco Itaú and Unibanco, in 2007 in connection with their roles as underwriters on the $2 billion initial public offering of Brazilian credit card processor Redecard. The firm reprised that role the following year on a $660 million secondary offering.
Cleary’s Odell has had a busy few days, with the Itaú Unibanco deal coming on the heels of her role in Brazilian oil company Petrobras’s $11 billion bond sale earlier this week. That transaction was the second-largest bond sale this year, after Apple’s $17 billion sale in April, and the largest ever in an emerging market, according to The Wall Street Journal.
Linklaters, meanwhile, is advising Citi on the sale of its Credicard business with a team led by corporate partner Alberto Luzarraga, who heads the firm’s São Paulo office. Washington, D.C.–based competition partner Jeffrey Schmidt is also advising, along with associates Daniel Law and Thomas Wright.
Marcelo Lamy Rego and Mauricio Pascoal of Pinheiro Guimarães Advogados are serving as local counsel to Citi on the deal, while Itaú Unibanco relied on an in-house legal team for local counsel, according to a Linklaters spokeswoman.