December 10, 2023

PNC buys the US operations of Spain’s BBVA

An automated teller machine is displayed at PNC Financial Services’ headquarters 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 US company announced Monday.

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

The all-cash deal is the second largest bank takeover in the United States since the 2008 financial crisis, according to Reuters, and US business is estimated to be 19.7 times its 2019 earnings and 1.34 times its book value as of September 2020. The price is about 50% of the company’s current market value. BBVA.

In a statement, BBVA Group CEO Carlos Torres Villa said the deal was a “very positive deal for all parties” and strengthened the “already strong financial position” of the Spanish group.

“We will have a great deal of flexibility to profitably invest capital in our markets, which will enhance our long-term growth profile, support economies in the recovery phase, and increase dividends to shareholders,” added Torres Villa.

After being approved by the two companies’ boards, the deal is expected to expire in mid-2021, with PNC as the surviving entity absorbing BBVA USA Bancshares and BBVA USA and merging with PNC Bank.

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“Our acquisition of BBVA USA will accelerate our growth path and drive shareholder value over the long term through the strategic deployment of returns from the sale of our investments in BlackRock,” said PNC Chairman, President and CEO William S. Demchak.