PNC to buy US operations of Spanish bank BBVA

An ATM is shown at the company headquarters for PNC Financial Services at One PNC Plaza in Pittsburgh, Pennsylvania.

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Spanish financial group BBVA has agreed to sell its US business, BBVA USA Bancshares, to PNC Financial Services Group for $ 11.6 billion, the American firm announced on Monday.

Headquartered in Houston, Texas, BBVA USA Bancshares has $ 104 billion in assets under management, with banking subsidiary BBVA USA operating 637 branches in Texas, Alabama, Arizona, California, Florida, Colorado and New Mexico. PNC said on Monday that the new company would have a coast-to-coast presence in 29 of the 30 largest markets in the US.

According to Reuters, the all-cash deal is America’s second-largest banking acquisition since the 2008 financial crisis, and has US business value of 19.7 times its 2019 earnings and 1.34 times its book value as of September 2020. The value represents approximately 50. % Of BBVA’s current market capitalization.

In a statement, BBVA Group Executive Chairman Carlos Torres Villa said the deal was a “very positive transaction for all parties” and enhanced the Spanish group’s “already strong financial position”.

“We will have the flexibility to deploy capital adequately to strengthen the long-term growth profile in our market and support economies in the recovery phase and increase distribution to shareholders,” Torres Villa said.

After being approved by the boards of the two companies, the deal is expected to close in mid-2021, with PNC as the surviving entity absorbing BBC USA Bancshares and BBVA USA as a merger with PNC Bank.

“Our acquisition of BBVA USA will accelerate our growth trajectory and increase long-term shareholder value through the strategic deployment of proceeds from the sale of our Blackrock investment,” said William S. Demchak, president, president and CEO of PNC.

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