General Superintendence approves joint venture between Itaú and BMG
CADE’s General Superintendence approved today the joint venture between Itaú Unibanco S/A and Banco BMG S/A. By the proposed deal, Itaú will own 70% of the joint venture, while BMG will hold the remaining 30%. This was the first merger reviewed by the Superintendence through its ordinary review proceeding (non fast-track) under the new legislation that took effect on May 29, 2012. It took 48 days for the completion of the analysis.
The joint venture was notified on 29 August 2012 and it aims to enhance the performance of those institutions in the market of payroll loans. Itaú will benefit from both the know-how and the network of BMG’s correspondents. BMG will be able to raise funds at a lower cost through Itaú. CADE’s General Superintendence understood that the remaining competition in the payroll loans market – which has shown high growth rates in past recent years – is enough to avoid harm to consumers.
Once the decision is published, CADE’s Tribunal still has 15 days to eventually request to also analyze the proposed merger, if it finds any substantial reason to do so. If no request is made by the Tribunal, the merger will be finally approved.