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A man walks past a Scotiabank branch on Bloor Street West in Toronto in this file photo.

Darren Calabrese/The Globe and Mail

Bank of Nova Scotia says its offer to buy a sizable stake in a Chilean bank for $2.9-billion has been accepted.

Scotiabank said Tuesday that Banco Bilbao Vizcaya Argentaria S.A. has agreed to sell its 68.19 per cent stake in BBVA Chile and its interests in certain subsidiaries.

The deal, which is expected to close next June, would double the the Canadian lender's market share in Chile to approximately 14 per cent and make Scotiabank the third-largest private sector bank in the country.

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"BBVA Chile has a proven track record … and this transaction demonstrates excellent synergy between both banks with customer-centric cultures," Scotiabank chief executive officer Brian Porter said in a statement.

BBVA Chile has $29-billion in assets and 4,000 employees at 127 branches. Scotiabank says it intends to merge BBVA Chile with its existing Scotiabank Chile operations, subject to regulatory approvals.

When the deal was announced last week, Scotiabank said the transaction is in line with its goal of increasing scale within the Chilean banking sector and the Pacific Alliance countries.

Chile's Said family, which owns 31.62 per cent of BBVA Chile, has waived its right of first refusal to acquire the share being sold to Scotiabank, but is willing to spend up to $650 million to own up to 25 per cent of the combined business when Scotiabank Chile and BBVA Chile are merged.

"We will combine Scotiabank's high-scale, high-sales productivity and retail portfolios with BBVA Chile's capital markets expertise and cash management capabilities," said Ignacio Deschamps, Scotiabank's group head of international banking and digital transformation told analysts on a conference call Tuesday. "We have a strong cultural fit drawn from two leading international banks with an established local presence in Chile for several decades."

Mr. Deschamps added that Scotiabank expects pretax cost synergies of between $150-million and $180-million by 2020. As well, the lender expects the transaction to be accretive to its earnings per share in the first year after completion, he added.

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