Banco do Brasil to sell insurance unit in biggest IPO of 2013

Listing could set stage for prolonged 2013 surge in offerings

Banco do Brasil, Brazil’s state-run bank, says it plans to spin off its insurance and pension unit for R$12 bn ($6 bn), making it the world’s biggest initial public offering so far this year and the biggest in Latin America since 2009.

Brazil’s largest bank plans to sell between 500 mn and 675 mn common shares in BB Seguridade Participações for between R$15 and R$18 each, the bank says in a regulatory statement published in the Folha de São Paulo newspaper. The pricing of the IPO is scheduled to take place on April 23.

The IPO would be the biggest in Latin America since October 2009 when Banco Santander Brasil, the Brazilian unit of the Spanish bank, raised about $7.5 bn in an IPO. It would be the biggest in the world since September last year, when Japan Airlines secured $8.5 bn.

The IPO could set the stage for a prolonged 2013 wave of offerings following a surge in IPO revenue. Global IPO proceeds in the first quarter of this year jumped 48 percent to $18.4 bn from $12.4 bn in the same quarter last year, according to Renaissance Capital, the international IPO research and tracking firm.

Financial sector IPOs, such as the planned BB Seguridade offering, have led the increase so far this year, with proceeds jumping more than four-fold to $8.8 bn in the first quarter, from $2 bn a year ago, Renaissance says. So far this year, the largest IPO was held by Zoetis, the animal health business of Pfizer, for $2.24 bn at the end of January.

According to Renaissance’s data, the BB Seguridade IPO is the third-largest offering currently in the planning stages, the largest being the planned sale of Everything Everywhere, the telecoms company jointly owned by Deutsche Telekom and France Telecom, for as much as $15.5 bn. The second-largest in planning is Japanese railway and property firm Seibu Holdings, valued at as much as $12.4 bn.


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