BB Seguridade IPO Chugs Along

Banco do Brasil is moving ahead with plans to carve out its insurance operation, and is ready to submit the matter to shareholders, it says. The bank has not commented on the size, though the market is expecting as much as BRL5bn ($2.51bn). Realization of the IPO “will depend on favorable conditions in the international and domestic capital markets,” the bank says. The timing is unclear, but ECM estimate the transaction may arrive during the June-July issuance window. The deal for the unit to be called BB Seguridade is to include both primary and secondary shares, and the bookrunners include Banco do Brasil, BTG Pactual, Bradesco, Citi Itau, and JPMorgan, according to people following the process. The state-controlled bank is seeking to consolidate its insurance businesses into a single company, BB Seguridade, to lower costs, increase scale and be better prepared for possible expansion. BB Seguridade would control Banco do Brasil’s two insurance joint ventures with Madrid-based Mapfre, and the bank plans to also expand into dental and health insurance brokerages. The listed company would directly control two holdcos, one responsible for insurance brokerage activities and the other for all other insurance operations.