PNC Financial Services to acquire BBVA USA Bancshares for $11.6bn

PNC Financial Services Group has signed an all-cash deal worth $11.6 billion to acquire BBVA USA Bancshares, the US banking arm of Spanish banking giant BBVA.

Based in Texas, BBVA USA Bancshares, through its subsidiary BBVA USA, holds $104 billion in assets.

Through its 637 branches spread across Texas, Alabama, Arizona, Colorado, Florida, California, and New Mexico, BBVA USA provides commercial and retail banking services.

BBVA USA is planned to be merged into PNC Financial Services Group’s subsidiary PNC Bank, based in Pennsylvania.

The combination is expected to become the fifth largest bank in the US based on asset size.

PNC Financial Services Group also expects the deal to considerably fast track its nationwide expansion strategy.

The enlarged PNC Bank will have a coast-to-coast franchise with a presence in 29 of the 30 largest markets in the country.

PNC Financial Services, the owner of PNC Bank, to acquire BBVA USA Bancshares for $11.6bn. Photo courtesy of Carl Lewis/Wikimedia Commons.

William S. Demchak – PNC Financial Services Group chairman, president and CEO said: “Our acquisition of BBVA USA will accelerate our growth trajectory and drive long-term shareholder value through a strategic deployment of the proceeds from the sale of our BlackRock investment.

“This transaction is an opportunity to navigate our future from a position of strength, accelerating PNC’s national expansion strategy 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.”

The transaction will not include BBVA Securities, BBVA Processing Services, and Propel Venture Partners Fund I.

PNC Financial Services Group will add close to $86 billion of deposits and $66 billion of loans, as of 30 September 2020, following the acquisition of BBVA USA Bancshares.

BBVA said that the acquisition price is nearly 20 times the 2019 earnings of BBVA USA Bancshares.

Carlos Torres Vila – BBVA Group Executive Chairman said: “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 U.S., who will be part of a leading financial services group in the country.

“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.”

The acquisition, which is subject to receipt of regulatory approvals and meeting of other customary closing conditions, is likely to be wrapped up in mid-2021.