Bancolombia Buys Banagrícola

Colombia’s largest financial institution, Bancolombia, is grabbing a larger slice of the action in Central America after it agreed to acquire Salvadorian financial group Banagrícola. Bancolombia has agreed to buy at least 52.9% and up to 100% of the Group for between $460 million and $900 million in cash via its subsidiary Bancolombia Panamá. Banagrícola owns local bank Banco Agrícola, which has a 29% share of all deposits and loans in El Salvador, as well as the leading insurer – Asesuisa – which has a 23% domestic market share. The Group also owns pension fund AFP Crecer and brokerage company Bursabac. Bancolombia Panamá will make, simultaneously, public offerings in Panama and El Salvador for all the ordinary shares of Banagrícola at $47 per share. The offerings will be made as soon as the acquisition is approved by regulators. Bancolombia hopes to close the deal in the second quarter of 2007. UBS acted as financial advisor to Bancolombia.