Citigroup has reached a definitive agreement to acquire Grupo Financiero Uno, the largest credit card issuer in Central America, and its affiliates.
Grupo Financiero Uno (GFU) is privately held and had more than one million retail clients representing 1.1 million credit card accounts, $1.2 billion in credit card receivables and $1.3 billion in deposits in Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama as of September 30, 2006. The company operates a distribution network of 75 branches and more than 100 mini branches and points of sale.
The acquisition of GFU, with $2.1 billion in assets, will significantly expand the presence of Citigroup’s Latin America consumer franchise, enhancing its credit card business in the region, and establishing a strong platform for regional growth in consumer finance and retail banking.
The transaction, which is subject to regulatory approvals in the US and each of the five Latin American countries, is anticipated to close in the first quarter of 2007 and is expected to be accretive to Citigroup’s earnings in the first year.
Citigroup’s acquisition of GFU is an important strategic step in our ongoing efforts to expand our consumer operations to better serve clients in Latin America, said Charles Prince, chairman and CEO of Citigroup. It quickly and effectively extends our retail distribution capabilities into five additional Central American countries and complements the leading presence we have built in corporate banking in the region during the past 100 years.
Citigroup already operates more than 1,600 retail bank branches and 500 consumer finance branches in Mexico and Latin America, serving 13,000 corporate clients, 17 million retail bank clients and nine million credit card holders.