BB Insurance IPO Aims above $4bn

Banco do Brasil is targeting a raise of more than BRL9.0bn ($4.5bn) through the carve-out IPO of its BB Seguridade insurance unit, and has scheduled pricing for April 23. The bank is selling 500m secondary shares at BRL15.00-BRL18.00 each, according to offering documents, indicating a BRL9.49bn deal at the midpoint if a 15% greenshoe is included. A 20% hot issue is also possible. All proceeds will go to Banco do Brasil. The state-controlled bank has consolidated its insurance businesses into the single BB Seguridade entity, to lower costs, increase scale and be better prepared for possible expansion and competition with the likes of Bradesco in a growing market. BB Seguridade controls 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 to-be-listed company directly controls two holdcos, one responsible for insurance brokerage activities and the other for all other insurance operations. Banco do Brasil, BTG Pactual, Bradesco, Citi, Itau, and JPMorgan are global coordinators on the sale, with Brasil Plural and Banco Votorantim as joint bookrunners. The deal could end up being LatAm’s largest IPO since Santander Brasil raised $7.5bn in 2009.