Itaú Chile-CorpBanca merger not happening this year

The planned merger between Itaú Chile and Chilean lender CorpBanca will not happen this year as initially announced, according to people familiar with the deal.

The merger would create a new Chilean bank that would be controlled by Brazilian banking giant Itaú Unibanco and operate under the Itaú brand. It would include the Chilean banking units of Itaú Unibanco and CorpBanca, as well as their Colombian subsidiaries.

CorpBanca said it expected to receive all the necessary approvals by the end of the fourth quarter, when it announced the merger in January.

Shareholders were expected to approve the merger at the end of the year but this has now been postponed until March or April next year, Chilean financial daily El Pulso reported unnamed sources from CorpBanca as saying.

El Pulso forms part of a media group that is owned by the local Saieh family, which is the controller of CorpBanca through CorpGroup.

The delay in the shareholder voting is due to unspecified merger related issues and a merger evaluation report that the IFC is waiting for investment bank Lazard to present, according to the sources. As one of the largest shareholders in CorpBanca with 5%, IFC's vote is crucial for approval of the merger.

IFC informed CorpBanca in July that it had asked an investment bank to provide an independent opinion on the proposed merger's financial agreement and its potential benefits.

The planned merger has come under strong fire from another CorpBanca minority shareholder, US-based Cartica Capital, which has taken legal action in both Chile and the US against a deal it deems highly unfair for minority shareholders.

In September a US court threw out a legal complaint filed by Cartica on what the investment company said were "technical grounds." Cartica also said at the time that it would continue to pursue legal action in Chile.

On the regulatory front, the proposed merger also has some way to go. The Brazilian central bank approved the merger in October, while regulators in Chile, Colombia, Panama and the US still have to approve the deal.