Imperia Intercontinental, main shareholder of Banco Cuscatlán y Seguros e Inversiones (SISA), received on Friday the corresponding regulatory approvals to acquire the operations of Scotiabank and Scotia Seguros El Salvador.
The Superintendency of Competition granted regulatory approvals to Imperia Intercontinental, main shareholder of Cuscatlan Bank, to acquire the operations of Scotiabank and Scotia Seguros El Salvador. The closing of the transaction is scheduled for the next weeks.
“We are pleased with the decision of the regulators and we appreciate the confidence placed,” said Fredy Nasser Facussé, Vice President of Imperia, in a statement released Friday.
“This purchase, which will represent the union of two large banks and insurers, reaffirms our commitment to El Salvador and our desire to continue investing in the development and growth of the country and of all Salvadorans. This positive news confirms that El Salvador is a country with favorable conditions to invest and with a promising future, ”adds the brief.
Both Scotiabank and Scotia Seguros will continue to operate in El Salvador as they have been doing until today, it is explained.
The clients of Scotiabank and Scotia Seguros, as well as those of Banco Cuscatlán and Seguros SISA will not be impacted since their operations continue in the same way they have been doing, the statement said.
The purchase process
The process For Imperia Intercontinental to acquire the operations of Scotiabank and Scotia Seguros El Salvador, it took almost a year since in February Banco Cuscatlán announced that it would acquire 100% of ScotiaBank’s shares in El Salvador.
The acquisition was subject to the authorization of the Superintendency of Competition and the Superintendence of the Financial System of El Salvador and the regulatory approval, which was finalized on Friday, should be expected.
Meanwhile, all ScotiaBank operations, branches and financial products will continue to operate on a regular basis.
In July 2019, the Superintendency of Competition notified Imperia Intercontinental that it had admitted the request to acquire the shares that The Bank of Nova Scotia owns in Scotiabank El Salvador and Financial Investments Scotiabank El Salvador.
“We are pleased to announce this important agreement, subject to regulatory approvals, with which we intend to enhance the best benefits and opportunities for our banks’ clients,” Eduardo Montenegro, Chairman of the Board of Directors of Banco Cuscatlán and the SISA insurer.
For its part, ScotiaBank reported that this transaction would generate a loss of approximately $ 170 million, which represents the carrying amount of goodwill related to these businesses and would be recorded in the second quarter of 2019.
It is worth mentioning that this was the second petition filed since Imperia announced in February 2019 that it had reached an agreement for the purchase of the Canadian bank.
At the beginning of June, the same Superintendency informed that it did not admit Imperia’s first request for not presenting the necessary information within the deadlines established by the Competition Law and the Administrative Procedures Law.
Seven months after the authorization of the Superintendency of Competition, Imperia received the authorization for the purchase and the process is expected to be completed in the coming weeks.
The amount of the transaction is unknown, but with this purchase, Banco Cuscatlán will be in the second position in terms of assets referred to in the ranking of Salvadoran banks, and SISA would consolidate its leading position in the insurance market.
“We are confident that we are on the right track. With this admission, we enter the final stage of approvals to finalize the union of two large institutions committed to the development and growth of Salvadorans, ”said the president of the board of directors of Banco Cuscatlán and Seguros SISA when he received the notification.
In 2018, ScotiaBank also sold its operations in nine Caribbean countries and its life insurance operations in Jamaica and Trinidad and Tobago.
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