BES And BPI-SGPS Announce Merger to Create the Leading Listed Portuguese Banking Group.Business Editors LISBON, Portugal--(BUSINESS WIRE)--Jan. 18, 2000 The Boards of Directors of both BES (Banco Espirito Santo) and BPI-SGPS (Banco Portugues de Investimentos) yesterday evening unanimously recommended a merger of the two institutions. The transaction will be implemented through the exchange of 692 newly issued BES.BPI-SGPS shares for each 100 existing BES shares; as a result, existing BES and BPI-SGPS shareholders will hold 59% and 41%, respectively, of the combined entity. Merger Rationale The merger of BES and BPI establishes the leading listed Portuguese financial institution, strongly positioned to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. industry trends in the rapidly consolidating European banking sector. The merged entity will enjoy outstanding leadership positions in the Portuguese banking market, including Number One in Commercial Banking - with an estimated 22% to 25% market share -, in Investment Banking, and in Private Banking. BES.BPI will operate the largest Portuguese banking network, with 1,149 branches (557 from BES and 592 from BPI), which will continue to operate under separate brands in Portugal. The merger, which has as its main strategic objectives sustained growth and high profitability, combines the strengths of two leading institutions with highly complementary competencies, as well as a valuable position in Europe through a network of strategic shareholders and partners with world-class skills in financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. , as ESFG, Credit Agricole, Banco Itau, La Caixa "la Caixa" is the common name for the Caixa d'Estalvis i Pensions de Barcelona (Spanish: Caja de Ahorros y Pensiones de Barcelona), a pension and savings bank in Spain. , and Allianz. Merger Terms and Timetable On the basis of the proposed exchange ratio, the number of newly issued BES.BPI-SGPS shares will be 813.1 million, which, added to the 565.0 million current outstanding shares as of December 31, 1999, will make a total of 1,378.1 BES.BPI-SGPS shares. The approval of the merger by the Board of Directors of each company will be followed by a General Meeting of Shareholders of both institutions scheduled for March 2000. The transaction is also subject to regulatory approval. The merger will have economic effect from the second half of 2000. Management Structure and Corporate Governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. The top management structure will be as follows: -- Chairman: Artur Santos Artur de Oliveira Santos was the mayor of Ourem, in which the town of Fatima was located, during the time of the apparitions of Our Lady of Fatima to three young shepherd children in 1917. Silva -- Vice Chairman & CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. : Ricardo Espirito Santo Salgado -- Vice Chairman: Fernando Ulrich -- Vice Chairman: Mario Mosqueira do Amaral do Amaral may refer to:
The Executive Committee of BES.BPI will comprise five members appointed by BES and four members appointed by BPI. The Board of Directors will include the Chairman and all the members of the Executive Committee, as well as 21 non-executive Board members. The members of the Executive Committee will be the heads of the new group's nine business units: Treasury and Finance Ricardo Espirito Santo Salgado Retail and Asset Management Fernando Ulrich Systems and Operations Antonio Domingues Corporate Banking Antonio Souto Private Banking Jose M. Espirito Santo Investment Banking Manuel Serzedelo de Almeida International Mario Amaral Internet and Alternative Channels Jose Pena Amaral Institutional Banking & Risk Management Antonio Seruca Salgado Main Objectives for the Combined Group BES.BPI has set as clear objectives leadership, growth and profitability. With significant synergies through revenue enhancements and efficiency gains, the merged entity will be EPS-enhancing from day one for shareholders of both institutions, representing a blue-chip investment opportunity with large market capitalization Market Capitalization A measure of a public company's size. Market capitalization is the total dollar value of all outstanding shares. It's calculated by multiplying the number of shares times the current market price. This term is often referred to as market cap. and liquidity. *t (In Euro million) BES BPI BES+BPI Net income(A) 141 95 236 Assets 25,221 15,263 40,484 Customer deposits 15,682 9,412 25,094 Loans 16,131 8,754 24,885 Off-balance sheet resources 6,220 4,588 10,808 Pension Funds 963 1,682 2,645 Shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. 962 534 1,495 ROE 19.2% 23.6% 20.6% NPL 1. NPL - New Programming Language. IBM's original (temporary) name for PL/I, changed due to conflict with England's "National Physical Laboratory." MPL and MPPL were considered before settling on PL/I. Sammet 1969, p.542. 2. ratio (90 days) 2.1% 1.7% 2.0% Loan Loss Coverage Ratio 133% 147% 137% Cost-to-income Ratio(B) 53% 71% 60% (A) First nine months of 1999 (B) Including amortization On this transaction, BES was advised by Merrill Lynch Merrill Lynch & Co., Inc. (NYSE: MER TYO: 8675 ), through its subsidiaries and affiliates, provides capital markets services, investment banking and advisory services, wealth management, asset management, insurance, banking and related products and services on a global basis. and BPI by Goldman Sachs. |
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