Brazil’s state-controlled Banco de Brazil and its rival Bradesco have agreed to acquire stakes in BES Africa, a Banco Espirito Santo (BES) holding company that makes investments in the African continent. The joint venture is intended to expand the Brazilian banks’ international operations and benefit Brazilian businesses operating in Africa.
The move follows similar steps taken by China over the past few years to increase the presence of its financial firms in the African continent as a means of building soft-power in the region and securing the long-term growth of the African market and the Chinese firms positioned to benefit from it. As The Economist reported last month, the drastic upsurge in Brazil’s distribution of aid and money to Africa over the past decade reflects Brazil’s growing interests in Africa’s resources, economic development, and growing consumer base. The direct participation of some of Brazil’s largest commercial banks in the African continent will further the Brazilian state’s goals of strengthening domestic multinational firms and establishing new markets for Brazilian goods.
In Monday’s press conference Brazil’s finance minister Guido Mantega – along with the CEOs of Bradesco, Banco do Brasil and Banco Espirito Santo – announced their plans to build on BES’ existing network of branches in the region and use their combined financial clout to fund larger acquisitions. Minister Mantega also announced that the new entity would not only do business in Portuguese-speaking African countries such as Angola, Mozambique and Cape Verde, but invest in non-Portuguese speaking countries as well, including South Africa, Algeria and Morocco.
According to the filing “The three financial firms consider an eventual partnership as an important means to support the overseas move by Brazilian and Portuguese companies and to assist with the growing trade relations” with Africa.
(Photo by Flickr user Gregorius Mundus)
