Corrected: Elavon Brazil sale to include U.S. Bancorp controlling stake -sources

Banco Bradesco

10/02/2016 23:15

(Corrects name of Brazil unit of Elavon throughout to Elavon do 
Brasil, not Elavon no Brasil.) 
    By Cesar Bianconi and Aluísio Alves 
    SAO PAULO, Feb 10 (Reuters) - U.S. Bancorp will likely join 
partner Citigroup Inc and sell its stake in Elavon do Brasil, a 
Brazilian credit card processing joint venture that Citigroup 
has been trying to exit since late last year, two sources 
involved in sale talks told Reuters. 
    Elo Participacoes SA, a holding company controlled by Banco 
Bradesco SA  BBDC4.SA  and Banco do Brasil  BBAS3.SA , has been 
in negotiations to buy Citigroup's  C.N  49 percent stake in 
Elavon do Brasil. With the 51 percent stake of U.S. Bancorp 
 USB.N  now on the table too, Elo is in talks to buy the whole 
company, the first source said. 
    The sources spoke to Reuters on Friday and Monday.    
    During talks, Bradesco refused to accept demands that 
Brazilian credit card transactions continue to be carried out on 
Elavon data systems in the United States, a condition that would 
saddle Elavon's Brazilian unit with fees in dollars, the second 
source said. 
    Neither of the sources would give a value for a possible 
Elavon do Brasil purchase. They requested anonymity because the 
talks between Elavon do Brasil and Elo are private.  
    A deal, though, could be slowed or complicated by Brazil's 
antitrust regulator, Cade, the two sources said. 
    Cade declined to comment on a deal until a formal request 
for approval is made. It is common, though, for companies 
negotiating mergers or acquisitions to consult the agency before 
making a formal request for approval of a transaction.  
    Banco do Brasil and Bradesco, the owners of Elo, are also 
the principal partners in Cielo  CIEL3.SA , the biggest 
electronic payments company in Brazil.  
   Elavon do Brasil, even though it has only 1 percent to 2 
percent of the market offers a simpler and cheaper product and 
could complement the services offered by Cielo. 
    U.S. Bancorp has owned U.S.-based Elavon Inc since 2001. It 
has been in the Brazilian joint venture with Citigroup since 
2012. Citigroup sought to sell its stake after Brazil's central 
bank demanded that Elavon do Brasil partners put more capital 
into the company even as the economy was shrinking.  urn:newsml:reuters.com:*:nL8N13D477 
    Elavon do Brasil had originally hoped to win 15 percent of 
the Brazilian market, but it has been pushed aside by rivals  
Cielo, the Rede unit of Itau Unibanco SA  ITUPU.UL  and GetNet, 
owned by Santander Brasil SA  SANB11.SA , which control more 
than 90 percent of the Brazilian market. 
    Elavon do Brasil, Banco do Brasil, Bradesco, Citigroup, 
Elavon and U.S. Bancorp all declined to comment. 
 
 (Writing by Jeb Blount; Editing by Steve Orlofsky) 
 ((Jeb.Blount@thomsonreuters.com; +55-21-2223-7143; Reuters 
Messaging: jeb.blount.thomsonreuters.com@reuters.net)) 
 
Keywords: US BANCORP ELAVON/BRAZIL