On November 23, 2004, Scotiabank announced its US$180 million cash offer to purchase up to 100 per cent shares of Banco de Comercio (BanCo) via public offer. The offer was very successful with over 97.71 per cent of all shares being tendered for sale. This tender offer was only the second public tender offer completed in El Salvador and the first involving the shares of a financial institution. The transaction includes the merger of Scotiabank El Salvador and BanCo. The merger transaction is expected to close before March 31, 2005 and is subject to regulatory and shareholder approvals.
Scotiabank El Salvador is the fifth largest bank in the country. With the merger of Scotiabank El Salvador and BanCo, Scotiabank will become the majority shareholder of the country’s fourth-largest bank, with a consolidated market share of more than 17 per cent. The merger will create a bank with nearly US$1.6 billion in assets. BanCo offers products and services in the personal, commercial and corporate banking areas. BanCo is also active in the remittance business, with 12 branches in the US. Through affiliates, the bank also has a presence in the Salvadorian insurance, factoring and leasing markets.
Scotiabank’s international counsel was McCarthy Tétrault LLP, with a team consisting of Ian Arellano, Steven Kim and Elke Rubach (corporate finance, M&A). Benjamin Valdez from Rusconi, Valdez, Medina & Asociados acted as external local counsel to Scotiabank. BanCo was represented by Dionisio Machuca and Carlos Zablah, in-house counsel, with assistance from Geoffrey Randall and Luis de Armas from Shutts & Bowen LLP.