By Brazil Stock Guide – Banco Santander plans to acquire the roughly 10% stake it does not already own in Santander Brasil through a share-exchange offer that values each SANB11 unit at approximately R$ 29.04, a 15% premium to Thursday’s closing price of R$ 25.25.
The transaction could be worth as much as € 1.908 billion and will cover common shares, preferred shares, units and American Depositary Shares issued by Santander Brasil that are not held directly or indirectly by the Spanish parent. The exchange offers are expected to be launched simultaneously in Brazil and the United States.
The consideration will not be paid in cash. For each Santander Brasil unit or ADS, investors will receive 0.4056 BDR or ADS of Banco Santander. Each common or preferred share will be exchanged for 0.2028 BDR or ADS of the Spanish bank.
Banco Santander shares closed at € 12.2480 in Europe, up 2.48%. Based on the R$ 5.8461 per euro exchange rate used in the proposal, the exchange ratio implied a value of approximately R$ 29.04 per SANB11 unit, compared with the Brazilian unit’s closing price of R$ 25.25.
Because the consideration will consist of shares, however, the final value is not fixed. The amount received by investors will depend on Banco Santander’s share price and currency movements through completion of the offer. The exchange ratio may also be adjusted for dividends, interest on equity, stock dividends, stock splits or reverse stock splits.
The offer will be voluntary, will not be subject to a minimum acceptance threshold and is not intended to delist Santander Brasil. The bank will remain listed on B3 after the transaction, although strong participation could significantly reduce SANB11’s free float and trading liquidity.
The outcome may be different in the United States. Depending on the level of acceptance, Santander Brasil’s ADSs could be delisted from the New York Stock Exchange and deregistered with the U.S. Securities and Exchange Commission.
If all eligible investors accept the offer, Banco Santander would issue approximately 156 million new shares, equivalent to about 1.1% of its current share capital. The transaction remains subject to regulatory approvals from Brazil’s securities regulator CVM, B3 and the SEC, as well as shareholder approval at the Spanish parent for the related capital increase.
A Bigger Bet on Brazil
Santander described the transaction as part of its strategy to simplify the group, increase its exposure to Brazil and deploy capital into assets capable of generating attractive shareholder returns.
“Brazil is one of Santander’s core markets,” Executive Chair Ana Botín said, citing the bank’s large and growing customer base and significant opportunities for profitable growth in the country. She said the transaction reinforces the group’s long-term commitment to Brazil.
Santander expects the acquisition to increase earnings per share by approximately 0.5% from 2028 and tangible book value per share by around 0.6%, while remaining neutral to the group’s capital ratio.
For SANB11 investors, the proposal offers an immediate premium but also changes the nature of the investment. Those who accept will give up direct exposure to Santander Brasil and instead hold shares in a geographically diversified global banking group. Investors who remain will retain exposure to the Brazilian operation but could face lower liquidity if participation in the offer is high.
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