Brazilian card-payment processor Cielo has started negotiations with federally controlled Banco do Brasil to manage its debit and credit card transactions.
Cielo will pay BRL 9bn (US$3.46bn) to take over the bank’s credit card operations, reported a local magazine Veja, without disclosing its sources.
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The agreement will benefit Cielo by diversifying its business and revenue stream, while it will facilitate cash infusion for Banco do Brasil.
According to a filing by Cielo, which is controlled by Banco do Brasil and Banco Bradesco holding 28.65% stake each, the deal will refrain Cielo board directors chosen by Banco do Brasil from voting on the matter.
Third-quarter net income for Banco do Brasil’s card business rose to BRL 512m, up by 50% as against a year before.
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