MADRID (Reuters) – Caixabank has agreed to buy Bankia for 4.3 billion euros ($5.1 billion) in an all-share deal that creates Spain’s biggest domestic lender and signals a pick up in mergers among Europe’s banks as they battle the fallout from the COVID-19 pandemic.

The merger will create the largest domestic bank by assets with a combined market value of more than 16 billion euros ($19 billion), in a deal underpinned by annual cost savings of 770 million euros, the companies said on Friday.

European banks are under growing pressure to join forces to deal with rising bad debts and record-low interest rates. Italy’s Intesa Sanpaolo is taking over Unione di Banche Italiane, and Spain’s Sabadell has also held informal talks about a possible tie-up.

Bankia BKIA.MC chairman Jose Ignacio Goirigolzarri told analysts the deal had been done in anticipation of a “more complex environment” triggered by the pandemic.

“We

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MADRID (Reuters) – Caixabank has agreed to buy Bankia for 4.3 billion euros ($5.1 billion) in an all-share deal that creates Spain’s biggest domestic lender and signals a pick up in mergers among Europe’s banks as they battle the fallout from the COVID-19 pandemic.

The merger will create the largest domestic bank by assets with a combined market value of more than 16 billion euros ($19 billion), in a deal underpinned by annual cost savings of 770 million euros, the companies said on Friday.

European banks are under growing pressure to join forces to deal with rising bad debts and record-low interest rates. Italy’s Intesa Sanpaolo is taking over Unione di Banche Italiane, and Spain’s Sabadell has also held informal talks about a possible tie-up.

Bankia

chairman Jose Ignacio Goirigolzarri told analysts the deal had been done in anticipation of a “more complex environment” triggered by the pandemic.

“We believe

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FILE PHOTO: An Estelada (Catalan separatist flag) is seen on a balcony near a Caixa bank branch in Barcelona


  • CaixaBank and Bankia received approval from their boards to merge, creating a bank worth more than $786 billion on Friday. 
  • CaixaBank will exchange 0.6845 of its shares for one Bankia share.
  • The new bank will operate under CaixaBank’s brand and will have more 20 million customers.
  • Visit Business Insider’s homepage for more stories.

CaixaBank and Spanish-state owned Bankia said on Friday they had got the greenlight from their boards to merge, creating the country’s largest domestic bank.

The deal will create a bank with assets of more than $786 billion. CaixaBank will exchange 0.6845 of its shares for one share in Bankia.

The operation is expected to close in the first quarter of 2021, as the merger still needs to be approved by both banks’ shareholders, as well

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MADRID (Reuters) – The controlling shareholders in Spain’s Caixabank and state-owned Bankia are close to agreeing on Valencia as their joint headquarters but are still mulling other aspects of the planned takeover, two sources with knowledge of the deal said on Monday.

The choice of the headquarters has become a sensitive political issue as pro-independence parties in the neighbouring region of Catalonia, who could play a pivotal role in passing Spain’s 2020 budget, have advocated for Caixabank to move its HQ back to Barcelona from Valencia, Spain’s third-largest city.

“The negotiations between controlling shareholders in the two lenders are at a very advanced stage on picking Valencia as the HQ though the agreement has not been closed yet,” one of the sources said.

Bankia

, Caixabank

and the Economy Ministry declined to comment.

Bankia established its HQ in Valencia after a merger of seven former savings banks in 2010. Caixabank

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(Bloomberg) — Spain’s CaixaBank SA and Bankia SA are exploring a merger to form the largest lender in the country and kickstart consolidation in one of the hardest-hit European economies during the pandemic.

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The firms are examining an all-share transaction, CaixaBank said in a statement overnight, in a deal that would create a lender with a combined market value of about 14 billion euros ($16.6 billion) as of Thursday. The talks are in an advanced stage and an agreement could be reached as soon as next week, according to two people familiar with the matter.

Shares of both banks soared, with Bankia gaining the most in seven years.

Barcelona-based CaixaBank would probably take over a Madrid rival that’s about a third of its size, creating a lender that would distance rivals Banco Santander SA and Banco Bilbao Vizcaya Argentaria SA at home. It would mark the first major

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