ITA�SA, BANCO ITA� HOLDING FINANCEIRA, UNIBANCO HOLDINGS, UNIBANCO EXECUTIVE SUMMARY SAO PAULO, Nov. 3 /PRNewswire-FirstCall/ -- The controlling shareholders of Itausa and Unibanco Holdings announce to the market that a joint venture agreement was executed today to merge the financial operations of Itau and Unibanco, establishing the largest private financial conglomerate in the Southern Hemisphere, with a market capitalization among the top 20 in the world. The new financial institution will have the ability to compete in the international arena with the largest world banks. The joint venture provides for a corporate restructuring that will cause the migration of current shareholders of Unibanco Holdings S.A. ("Unibanco Holdings") and Unibanco - Uniao de Bancos Brasileiros S.A. ("Unibanco") to a publicly listed company to be called Itau Unibanco Holding S.A., which is currently Banco Itau Holding Financeira S.A. ("Itau Unibanco Holding"), which will be made through a merger of shares ("incorporacao de acoes"). Itau Unibanco Holding will have Itausa - Investimentos Itau S.A and the controlling shareholders of Unibanco Holdings, with control to be exerted by means of a non-financial institution to be incorporated for the purpose of this transaction. Unibanco and Unibanco Holdings' common shares currently held by its non-controlling shareholders will be exchanged into common shares issued by Itau Unibanco Holding, following the same exchange rate negotiated by the Parties for the exchange of the common shares held by the controlling shareholders of Unibanco Holdings. For the preferred shares, the exchange rate was calculated based on the market average of price of the Units (share certificates representing one preferred share of Unibanco and one preferred share of Unibanco Holdings) and of the preferred shares of Banco Itau Holding Financeira S.A. in the last 45 sessions of the Brazilian Stock Exchange - Bovespa. Both the Units and the preferred shares of Banco Itau Holding Financeira S.A. are part of the IBX-50 and the Ibovespa, and are also traded on the New York Stock Exchange. NUMBER OF SHARES OF UNIBANCO AND OF UNIBANCO HOLDINGS TO BE EXCHANGED FOR EACH SHARE OF ITAU UNIBANCO HOLDING: Security Exchange Rate ON UNIBANCO (UBBR3) 1,1797=1 ON UNIBANCO HOLDINGS (UBHD3) 1,1797=1 UNIT (UBBR11) 1,7391=1 PN UNIBANCO (UBBR4) 3,4782=1 PN UNIBANCO HOLDINGS (UBHD6) 3,4782=1 GDRs (UBB) 0,17391=1 The conclusion of the corporate restructuring herein described shall depend on the approval of the Central Bank of Brazil and of other relevant authorities. This transaction will result in a Brazilian bank with the commitment, strength and economic capability necessary to transform it into a vital agent to the development of national companies and of Brazil. DETAILS OF THE TRANSACTION The controlling shareholders of Itausa and of Unibanco Holdings hereby announce to the market that they have, as the result of the negotiations established under secrecy through the last fifteen months, executed today a joint venture agreement aiming at the unification of the financial operations of Itau and Unibanco, envisioning the biggest private financial group of the Southern Hemisphere, with a market capitalization among the top 20 in the world. The new financial institution will have the ability to compete in the international arena with the largest world banks. The joint venture provides for a corporate restructuring, that will cause the migration of current shareholders of Unibanco Holdings S.A. ("Unibanco Holdings") and Unibanco - Uniao de Bancos Brasileiros S.A. ("Unibanco") to a publicly listed company to be called Itau Unibanco Holding S.A., which is currently Banco Itau Holding Financeira S.A. ("Itau Unibanco Holding"), which will be made through a merger of shares ("incorporacao de acoes"). Itau Unibanco Holding will have Itausa - Investimentos Itau S.A and the Moreira Salles family as its controlling shareholders, with control to be exerted by means of a non-financial institution to be incorporated for the purpose of this transaction. Itau and Unibanco understand that with this joint venture they will be able to offer the best products and services in the Brazilian market for their millions of corporate and individual clients. Itau Unibanco Holding brings together their remarkable complementary aspects. 1. PURPOSE Stockholders' Equity of approximately 51.7 billion Reais (09.30.08) and a net profit of 8.1 billion Reais up to September 2008 ensure a relevant capital base for Itau Unibanco Holding, preparing it for: -- strengthening the support to Brazilian companies and their national and international operations; -- expanding its business in Brazil; -- supporting the growth of the credit transaction of our clients; -- competing in the international market; -- substantially increasing economic scale gains in all client segments; -- substantial synergies in various business. One of the competitive differentials of Itau and Unibanco is the internal segmentation strategy of the businesses, which allows a better identification of the necessities of each class of clients, the creation of specific banking products and services and the optimization of the use of each potential segment, providing a broad range of banking products and services for a diversified base formed by individual and corporate clients. Itau Unibanco Holding will increase the potential of this segmented culture. 2. CORPORATE STRUCTURE Before the conclusion of the corporate restructuring, Itausa will transfer Banco Itau Holding Financeira S.A. its shares of Banco Itau Europa S.A. for approximately R$1.2 billion, with R$550 million by means of the issuance of common shares of Banco Itau Holding Financeira S.A. (21 million of shares) and the remaining amount paid in cash. This transaction will not impact the exchange rate provided by item 3.1. The chart at http://www.prnewswire.com.br/arq/Summarizes_Itau.jpg summarizes the current situation and the result of this transaction. Itau Unibanco Holding will be controlled by IU Participacoes S.A., according to the chart at the web site above. 3. EXCHANGE RATES OF SHARES 3.1. Exchange Rate of Shares Unibanco and Unibanco Holdings' common shares currently held by its non-controlling shareholders will be exchanged into common shares issued by Itau Unibanco Holding, following the same exchange rate negotiated by the Parties for the exchange of the common shares held by the controlling shareholders of Unibanco Holdings. For the preferred shares, the exchange rate was calculated based on the market average of price of the Units (share certificates representing one preferred share of Unibanco and one preferred share of Unibanco Holdings) and of the preferred shares of Banco Itau Holding Financeira S.A. in the last 45 sessions of the Brazilian Stock Exchange - Bovespa. Both the Units and the preferred shares of Banco Itau Holding Financeira S.A. are part of the IBX-50 and the Ibovespa, and are also traded on the New York Stock Exchange. NUMBER OF SHARES OF UNIBANCO AND OF UNIBANCO HOLDINGS TO BE EXCHANGED FOR EACH SHARE OF ITAU UNIBANCO HOLDING Security Exchange Rate ON UNIBANCO (UBBR3) 1,1797=1 ON UNIBANCO HOLDINGS (UBHD3) 1,1797=1 UNIT (UBBR11) 1,7391=1 PN UNIBANCO (UBBR4) 3,4782=1 PN UNIBANCO HOLDINGS (UBHD6) 3,4782=1 GDRs (UBB) 0,17391=1 The amount of shares held, directly and indirectly by Itausa, at the end of this transaction will be increased by 8.3%. The issuance of common and preferred shares will amount 1,120,896 thousand shares, which is equivalent to 27.4% of the total amount of shares of Itau Unibanco Holding. 3.2. Negotiation Between the date of the Extraordinary Shareholder Meeting, which will decide on the corporate restructuring, and the date of the approval of the transaction by the Central Bank of Brazil, the shares of Itau and Unibanco will be negotiated as usual, both on the BOVESPA and the New York Stock Exchange. 3.3. Shareholders' Rights In the same period mentioned in item 3.2, the payment of the dividends and interest on capital stock to the shareholders will continue to be made by Itau and Unibanco, individually. 4. CORPORATE GOVERNANCE The Board of Directors of Itau Unibanco Holding will be composed of fourteen members, of which six will be appointed by the controlling shareholders of Itausa and the Moreira Salles family. The remaining eight members will be independent Directors. Mr. Pedro Moreira Salles will be the Chairman of the Board of Directors and Mr. Roberto Egydio Setubal will be the Chief Executive Officer of Itau Unibanco Holding. A Transition Committee will be created at Itau Unibanco Holding to assure an efficient transition, and will determine the mechanics and timetable of the integration of Itau and Unibanco's operations. There will be no changes in the operations and transactions conducted with clients, creditors and suppliers. Itau and Unibanco will continue to operate in Brazil and abroad under the same terms that operations are currently conducted. 5. MAIN INFORMATION ON THE TRANSACTION The joint venture will result in a notable increase of the consolidated figures, as follows: R$ Billion September 30, 2008 Itau Unibanco Itau Unibanco Holding Assets 396.6 178.5 575.1 Total Loans (without sureties and endorsements) 151.0 74.3 225.3 Deposits + Debentures(a) 162.7 72.4 235.1 Stockholders' Equity 32.1(b) 12.9 51.7(c) Accumulated Net Income (January through September) 5.9 2.2 8.1 ROE (on average Equity) 26.3% 24.4% - Assets under Management (AUM) 209.4 55.6 265.0 Market Capitalization(d) 69.1 18.8 - (a) Does not include inter-banking deposits. (b) Includes the transfer of Banco Itau Europa pursuant to item 2 above. (c) Considering the tax effects. (d) Based on the closing price of UBBR11 and ITAU4 as of October 31, 2008. 5.1. Stockholders' Equity Itau Unibanco Holding's stockholders' equity will be approximately R$ 51.7 billion, becoming the financial conglomerate with major capital base in Brazil (as of September 30, 2008). In the event the joint venture would be in place in the third quarter, the BIS ratio would be 15.1%, considering the tax effects. A positive impact in the consolidated net income is estimated as soon as the transaction is implemented. 5.2. Regulatory Authorities The implementation of the joint venture set forth herein depends on the approval of the Central Bank of Brazil and of remaining applicable authorities. 5.3. Shareholders' Meetings The Shareholders' Meetings that will approve the necessary mergers for implementation of the joint venture will take place between the last week of November and the first week of December, based on the appraisal reports to be prepared pursuant to book and market values by recognized companies. 6. ACCOUNTING EFFECTS Considering the capital increase related to the merger of shares ("incorporacao de acoes"), the variation of its equity share, and the accounting and tax effects, the positive net effect estimated in the results of Itau Unibanco Holding will be equivalent to R$7.9 billion and that of Itausa will be R$ 2.5 billion. 7. CONFIDENCE IN THE FUTURE OF BRAZIL With this joint venture, Itau and Unibanco reaffirm their confidence in the future of Brazil, especially in this moment of important challenges in the economic environment and in the global financial markets. Investor Relations Officers Roberto Setubal Itausa - Investimentos Itau S.A. Alfredo Setubal Banco Itau Holding Financeira S.A. Geraldo Travaglia Unibanco Holdings S.A. Geraldo Travaglia Unibanco - Uniao de Bancos Brasileiros S.A. DATASOURCE: Banco Itau Holding Financeira CONTACT: Geraldo Soares, Banco Itau Holding Financeira, +55-11-5019- 1549, Web site: http://www.itau.com/

Copyright