Santander to sell Puerto Rico arm to FirstBank in $1.1bn deal
FirstBank Puerto Rico’s holding company First BanCorp has given FirstBank the green light to buy Banco Santander Puerto Rico (BSPR) in a deal valued at $1.1 billion.
With the acquisition premium set at $63 million, FirstBank will pay this in cash on top of the value of Banco Santander’s shares, coming to $425 million in total.
Once the acquisition is approved by regulators and the deal is closed by the predicted deadline of mid-2020, FirstBank will own all 27 bank branches on the island and take on the arm’s total assets of $6.2 billion, putting FirstBank at a total of $17.6 billion in assets.
“This acquisition will significantly improve our scale and competitiveness in Puerto Rico, while enhancing our funding and risk profile,” says First BanCorp’s president and CEO Aurelio Alemán.
First BanCorp’s CEO believes the transaction will give a 35% boost to 2020 consensus earnings of 81 cents per share.
Alemán says First BanCorp has “been preparing for a strategic transaction of this magnitude”, and that he hopes the acquisition will contribute to the economic recovery and redevelopment in Puerto Rico.