Citigroup, U.S. Bancorp go out cash-dropping Brazil card assignment

SAO PAULO Citigroup Inc and U.S. Bancorp have agreed to promote Brazilian card charge processing joint task Elavon do Brasil to a local rival for an undisclosed sum, finishing months of negotiations to go out the money-losing company.

each U.S. creditors, which had been companions in Elavon for five years, confirmed the transaction on Friday in separate statements that did no longer specify the fee of the sale or other details. U.S. Bancorp owns 50.9 percentage of Elavon, with Citigroup conserving the remainder.

The client, São Paulo-based totally Stone Pagamentos SA, agreed to refill Elavon's capital and offer additional price range for boom as part of the transaction, according to two resources with direct expertise of the deal. Elavon ended closing yr with bad fairness of 2 hundred million reais ($fifty six million), main regulators to press for a set off capital injection.

relations between both partners soured, and a sale started out to be negotiated overdue last year after Citigroup failed to come up with money to strengthen the finances of Elavon, Brazil's No. four price processor, Reuters stated in November.

Elavon did not benefit traction in Brazil's burgeoning $250 billion fee processing market, which is ruled by way of Cielo SA and Rede, a unit of Itaú Unibanco holding SA. while Cielo, Rede and peer GetNet Serviços personal a mixed 97 percent of the market, Elavon has much less than 2 percent.

Citigroup's mounting retail banking losses and rampant opposition from Cielo and different opponents thwarted Elavon's efforts to boom market percentage within the neighborhood card processing marketplace to a centered 15 percent. in advance inside the 12 months, Citigroup announced intentions to go out Brazil, wherein it has operated for extra than a century.

in keeping with the primary supply, Stone, a mobility and bills solutions company, is controlled by means of Brazilian investment company Arpex Capital, of which billionaire Jorge Paulo Lemann is a partner, and mid-sized patron lender Banco Pan SA.

Lemann, whose fortune Forbes magazine estimates at about $31 billion, shares manage of Anheuser Busch InBev SA, the sector's biggest beer maker, with buyout firm 3G Capital.

Efforts to touch Stone's media office had been unsuccessful.

Greenhill & Co Inc advised Elavon at the deal, with Citigroup's investment banking unit working at the bank's side and Stone now not the usage of a monetary adviser for the transaction, the resources stated.

Citigroup shares rose zero.4 percentage to $47.01, even as U.S. Bancorp introduced 1.nine percentage to $43.36 in afternoon new york stock alternate trading.