BTG buys Orama as Brazil's financial sector consolidation continues (updated)

Banco Santander Brasil SA

02/10/2023 13:18

(Rewrites throughout with context on consolidation in Brazil's
financial sector and comments from a BTG executive)
       SAO PAULO, Oct 2 (Reuters) - Brazilian investment bank
BTG Pactual  BPAC3.SA  on Monday announced a deal to buy
brokerage Orama DTVM, in yet another sign of consolidation in
the sector that saw several finance companies acquired by larger
rivals in recent years.
    The agreement adds to a number of acquisitions recently
closed by BTG, including those of brokers Planner and Elite and
holding group Universa, while rivals such as XP Inc  XP.O  also
remained active in the mergers and acquisition market.
    BTG Pactual said in a securities filing it will pay 500
million reais ($98.72 million) for all of Orama's activities
with the exception of its fund management business, a deal that
is part of its strategy to expand in digital platforms.
    The transaction, it said, will allow it to increase its
client base while advancing in the offering of products and
services for individuals.
    Orama has a total 18 billion reais of assets under custody
and about 360,000 clients, it noted.
    Deal flow in Brazil's financial sector has been high
recently, with the moves by BTG - Latin America's largest
investment bank - part of a broader trend that saw finance
giants purchasing smaller companies.
    BTG's main rival XP, for example, last year agreed to
acquire Credit Suisse-backed investment platform Banco Modal,
after also buying brokerages Rico, Clear, Singulare and several
asset managers.
    Santander Brasil  SANB3.SA  in the meantime bought online
broker Toro Investimentos, while Itau Unibanco  ITUB4.SA 
purchased Ideal and Avenue. Bradesco  BBDC4.SA  has owned broker
Agora since the late 2000s.
    BTG's head of digital platforms, Marcelo Flora, said in a
statement that the Orama deal will provide the lender with
"scale gains", citing lower fixed costs, efficiency gains and
non-specified synergies.
    The acquisition is still pending approval from Brazilian
regulators and the central bank. Sellers include hospital chain
Rede D'Or  RDOR3.SA  and Globo Ventures, an investment vehicle
of media conglomerate Grupo Globo, which had a 25% stake in
Orama each.
    
($1 = 5.0647 reais)

 (Reporting by Gabriel Araujo; Editing by Steven Grattan and
Emelia Sithole-Matarise)
 ((Gabriel.Araujo2@thomsonreuters.com; +55 11 5047-3352;))