BdB Advances Seguridade IPO

Banco do Brasil has made the initial filing for the carve-out IPO of its BB Seguridade insurance unit, according to regulatory documents. The state-controlled lender does not yet indicate the size of the transaction, though the market is expecting as much as BRL5bn ($2.53bn). The deal is to include both primary and secondary shares, representing up to 40% of the unit. The bookrunners include Banco do Brasil, BTG Pactual, Bradesco, Brasil Plural, 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.