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Crédit Agricole and Santander to Combine Custody and Asset Servicing

 

  • Crédit Agricole S.A. and Santander enter into a Memorandum of Understanding with a view to combining their custody and asset servicing operations
  • Crédit Agricole S.A. and Santander would hold 69.5% and 30.5% respectively of the combined entity that will keep the name CACEIS
  • Combination of  Santander Securities Services (“S3”) in Spain and Latin America (Brazil, Mexico and Colombia) with CACEIS
  • S3 Latin American activities would be jointly controlled by the new CACEIS and Santander
  • The combined entity would be among the major players worldwide and in Europe with EUR 3,343 bn in assets under custody and EUR 1,833 bn in assets under administration

Crédit Agricole S.A. and Santander have signed a memorandum of understanding with a view to combining their custody and asset servicing operations. The new entity would combine CACEIS, the custody and asset servicing business of Crédit Agricole S.A., and the Spanish, Brazilian, Mexican and Colombian activities of S3, Santander’s custody and asset servicing business.

Analysts say the transaction would combine two strong custody and asset servicing players to form a truly global player with enhanced growth prospects.

The transaction would entail the contribution of 100% of S3 Spain and 49.99% of S3’s operations in Latin America to CACEIS. As a result of this contribution, Crédit Agricole S.A. and Santander would hold 69.5% and 30.5% of CACEIS, respectively. The Latin American operations of S3 would be jointly controlled by CACEIS and Santander.

According to a joint statement, the combined CACEIS and S3 businesses would deliver scale and stronger competitive positioning as it benefits from enhanced geographical presence, the full coverage of the value chain and an expanded offering for both existing and new clients. The enlarged group would be better placed to capture growth in high potential markets (Latin America and Asia) and new opportunities. This enhanced growth potential combined with expected commercial and industrial synergies should result in long-term value creation for all stakeholders.

The enlarged group would continue to leverage on strong teams from both organisations with Jean-Francois Abadie, current CEO of CACEIS, as Chief Executive Officer of the new enlarged entity and Carlos Rodriguez de Robles, current General Manager for S3, leading the Spanish and Latin American activities.

“The new business will offer clients a comprehensive and strengthened value proposition, combining a deep industry expertise and ample product portfolio, with a profound knowledge and presence across our local markets,” said Carlos Rodriguez de Robles, General Manager for S3. “I am convinced the new entity will be a source of value creation for our shareholders and a great opportunity for the growth and development of our people.”

The signature of the final agreements between Crédit Agricole S.A. and Santander requires prior consultation with the relevant works councils.

The completion of the contemplated transaction will be subject to customary closing conditions, including regulatory approvals, and is expected to take place by the end of 2019.

Both banks anticipate that the impact on both capital and on earnings per share will not be material, for either party.

 

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