BBVA has agreed to sell to PNC its subsidiary in the U.S. for $11.6 billion (€9.7 billion¹) in cash, an amount that represents 19.7 times the unit’s 2019 earnings², and that is almost 50% of BBVA’s current market capitalization, creating significant value for shareholders. The transaction will have a positive impact on BBVA’s fully loaded CET1 ratio of c.300 basis points, or €8.5 billion of CET1 generation.
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“This is a very positive transaction for all sides. PNC has recognized the great value of our unique client franchise and of our great team in the US, who will be part of a leading financial services group in the country,” said BBVA Group executive chairman Carlos Torres Vila. “The deal enhances our already strong financial position. We will have ample flexibility to profitably deploy capital in our markets strengthening our long-term growth profile and supporting economies in the recovery phase, and to increase distributions to shareholders.”
In the U.S., BBVA is a Sunbelt-based bank with more than $100 billion in assets and 637 branches, with leading market shares in Texas, Alabama and Arizona. After the closing of the transaction, PNC, based in Pittsburgh, Pennsylvania, will become the country’s fifth-largest bank by assets. The transaction excludes the broker dealer (BBVA Securities) and the branch in New York, through which BBVA will continue to provide corporate & investment banking services to its large corporate and institutional clients. It also excludes the representative office in San Francisco and the fintech investment fund Propel Venture Partners.
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“Our acquisition will accelerate our growth trajectory and drive long-term shareholder value,” said William S. Demchak, PNC’s chairman, president and chief executive officer. “This transaction is an opportunity to navigate our future from a position of strength, accelerating PNC’s expansion while drawing on our experience as a disciplined acquirer. We are excited to bring our industry-leading technology and innovative products and services to new markets and clients, leveraging our mutual commitment to building diverse and high performing teams and supporting the communities we serve.”
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