Brazil’s Itau To Buy 35% Stake In Broker Avenue For $92 Mln, Eyes Control Later

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Brazil’s largest private lender Itau Unibanco Holding SA (ITUB4.SA) has agreed to acquire control of Avenue; a brokerage that provides Brazilians with access to foreign markets.

Itau Unibanco will spend 493 million reais ($92 million) for 35% of Avenue; including a cash injection of 160 million reais and a secondary share purchase, it said in a securities filing.

Itau will also be able to exercise a call option for the remaining equity interest held by Avenue shareholders five years:; after the closing of the first part of the deal, it added.

Formally known as Avenue Holding Cayman Ltd, the brokerage owns a U.S. digital securities broker; and has over 229,000 active clients and 6.4 billion reais under custody, Itau said.

The analyst noted the transaction is small, equivalent to 0.6% of Itau’s market cap; but “the deal with Avenue shows Itau is in attack mode, which we like”. The deal still requires approval from regulatory bodies.

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