On November 3,2008 Banco Itau Holding Financeira S.A. (ITU) and Uniao de Bancos Brasileiros S.A. (UBB) announced to merge their operations to form a new company called Itau Unibanco Holding S.A. The merger will be effected by the merger of shares(Common, Preferreds, GDRs) of both the companies.
Exchange Rate: Each 0.17391 UBB (GDR) will be exchanged for 1 share of the new Itau Unibanco Holding S.A.
As of September 30,2008 Itau had a market capitalization of 69.1 R$ Billion and Unibanco had a market of 18.8 R$ Billion. After the merger, the new bank will be among the Top 20 banks in the world in terms of market capitalization. Itau Unibanco Holding S.A. will have assets of 575.1 R$ B (or) about $265 billion, in assets.
Before this deal was announced, another Brazilian bank Banco Bradesco (BBD) was the largest private bank in Brazil. After the deal BBD will fall to number two since Itau Unibanco Holding S.A. will become the largest bank. The largest financial institution in Brazil is the government-owned Banco do Brasil.
Year-to-Date UBB and ITU are down -51.6% and -39.6% respectively as of Nov 7, 2008.
