In mid March, when the market rumours that Banco Galicia was planning to buy HSBC Argentina became deafening, I called some senior bankers in Buenos Aires. They focused on the swift revival of Argentine banks’ M&A appetite under new president Javier Milei. The locals told me they thought that Galicia’s strategy made sense – adding scale to one of the country’s biggest banks – but that it was the timing that was the interesting variable: the swiftness of this risk-on signal was validation of a renewed confidence in the new administration.
On Tuesday April 9, Galicia announced the deal had been struck – it had an agreement to purchase HSBC Argentina for $550 million. The final transaction value will be adjusted for the results of the business and fair value gains/losses on HSBC Argentina's securities between December of 2023 and the closing of the deal.
Banco Galicia will pay $275 million in cash and Grupo Galicia will issue $200 million in B shares to HSBC. Citi reckons that, using February's data, the operation implies a roughly 0.3x price to book value multiple for HSBC Argentina's $1.4 billion equity.
Additionally, Galicia will acquire HSBC Argentina's private debt for $75 million in B shares.
Galicia
