Safra buys financial institution Alfa – BizNews Brasil :: Information on Mergers and Acquisitions

Acquisition marks the group’s most aggressive expansion strategy in private banking and wealth management

Banco Safra has just completed the purchase of control of Alfa Financial Conglomerate, owner of Alfa bank. Safra paid BRL 1.03 billion to Administratora Fortaleza, the company that held the shares, in a transaction involving two of the most traditional family groups in the financial market in the country.

The bank of Minas Gerais origin had been considering the sale since the death of the founder, businessman Aloysio de Andrade Faria, in 2020. But it was this year that the five heiresses started a formal process. Rothschild and Mattos Filho acted as financial and legal advisors to Administrator Fortaleza. For the buyer, financial advice was provided by J.Safra Investment Banking and Pinheiro Neto Advogados.

Other interested parties evaluated the asset, including BTG Pactual and, at the beginning of negotiations, Bradesco, according to sources. Valor had informed in September about the negotiations, which then included other interested parties, such as BR Partners, Inter and Daycoval, a process that gradually narrowed.

In a statement, David Safra emphasized that “the transaction is a milestone in the history of the bank in Brazil. Customers, employees and shareholders of Alfa Financial Conglomerate and Safra Bank will benefit. We share values, long-term vision and passion for work, which gives us enormous confidence in the harmony and success of this operation”.

The acquisition marks a more aggressive stage for Safra to grow. The bank had already been drawing attention with the reinforcement of the private banking and wealth management team (areas in which Alfa operates) and also investment banking. A month ago, the group announced the hiring of José Olympio Pereira in a clear demonstration of its wholesale expansion ambitions and in a move that now seems to be orchestrated with the M&A. The arrival of the executive even raised market speculation that Safra would be eyeing a possible bid for assets from Credit Suisse, Pereira’s former home and which is undergoing a global restructuring. But the target was different.

The sale to Safra is also an outcome that comforts Aloysio Faria’s heirs, given the groups’ similarities in areas of activity, family composition and conservative profile. “They didn’t want something that would destroy the bank’s culture and history,” says an executive close to the family.

The financial conglomerate, which in addition to the bank includes a consortium administrator and an insurance company, originated from Banco da Lavoura in Minas Gerais, created in 1925, and renamed Banco Real in the 1970s. After Aloysio Faria sold Real to ABN Amro, in 1998, the banker created Alfa, which advanced in corporate services, private banking and wealth management in Brazil.

Alfa is run by executives with a long career at the bank who were close to Faria. The discreet banker from Minas Gerais worked almost daily at the headquarters in São Paulo until a few months before his death, at the age of 99. His daughters did not participate in the administration. In his management style, the habit of communicating through notes became known, which he spread across the tables, contracts and even in the responses to M&A proposals over the last few decades. In one of them, Faria made use of his post-it to give objective feedback on the offer described in some pages: NO. The banker also liked to go to the kitchen and shared his favorite cake recipes with a number of executives.

Faria also diversified the family business, with the ice cream brand La Basque, Águas da Prata, the construction materials chain C&C and the palm oil producer Agropalma – a portfolio not included in the transaction with Safra.

Banco Safra has R$270 billion in assets and manages R$300 billion in resources, and will add around R$25 billion in assets with Alfa. Silvio de Carvalho, president of the buying bank, says that the acquisition marks a new chapter in Safra’s history.

“It is a historic transaction in the Brazilian financial market. We are convinced that the operation between the two secular banks, the result of successful entrepreneurial trajectories and based on common values, will enhance the quality, perpetuity and excellence that we have always offered to our customers and employees”, added Fábio Amorosino, CEO of the Financial Conglomerate Alfa, 17 years in the group.

Source: Pipeline Value