MADRID (Reuters) – Spain’s Banco Santander said on Friday it will offer to buy the 8.3% stake in its Mexican unit it doesn’t already own, strengthening its grip on its Latin American businesses.

Santander is offering Banco Santander Mexico minority shareholders 24 Mexican pesos per share, representing a 24% premium on the March 25 closing price and a total of about 550 million euros ($648.01 million).

Santander’s offer is comfortably above the unit’s share price over the past year, though still below pre-pandemic levels and 22% lower than where it was when the Spanish lender first sought full ownership of its Mexican business in 2019.

With full control of Santander Mexico, the Spanish bank will increase its exposure to a region that has “structural growth and high and increasing profitability,” the lender said.

Santander has expanded in emerging economies it hopes will deliver faster-growth than its core markets in Europe of Spain and Britain. Its Mexican unit’s share price has been hit by Mexico’s struggles with the pandemic and an economic slump, though it remains one of Santander’s most profitable subsidiaries.

The deal will allow Santander to deploy capital it has been unable to pay in dividends due to regulatory curbs on shareholder payouts.

Santander expects to close the acquisition in the second or third quarter of this year and will then seek to delist the shares from the Mexican stock exchange.

The Spanish bank also said its overall revenue in the first quarter of 2021 was in line with the previous quarter and that it now expects a return on tangible equity of 10%.

Santander said it intends to return to its dividend payout ratio of 40% to 50% of ordinary earnings as soon as allowed to by regulators.

($1 = 20.6020 Mexican pesos)

($1 = 0.8488 euros)

(Reporting by Inti Landauro, Editing by Sherry Jacob-Phillips and Rachel Armstrong)