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.
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.