Santander Group buys control stake in El Corte Inglés

Banco Santander Group has announced the buy of a 51

percent controlling stake in the consumer finance business of the indebted Spanish department store El Corte Inglés. Earlier this week, Santander said its consumer finance subsidiary will buy 51 percent of Financeira El Corte Inglés for 140 million euros.

El Corte Inglés faces great pressure from creditors to sell assets and unload five billion euros in debt. Market expects the department store operator to see important benefit from the sale, as last year, the store's financing unit lent out 6.6 billion euros and generated 168.4 million euros in revenue.

"The agreement will allow Santander to strengthen its leading position in the European consumer finance market and will make its Spanish and Portuguese portfolios more diversified, thanks to the complimentary nature of Financiera El Corte Inglés," Santander said in a statement.

The department store saw its sales fall 8.0 percent in 2012 over the previous year to 14.5 billion euros despite slashing prices, especially on food and clothes, at a time when one in four Spaniards is out of work.

The bank said it expects the deal will be completed in the first quarter of 2014, once approved by the European Commission, the Bank of Spain and the Bank of Portugal.