BBVA Stock Up On Deal To Sell BBVA USA Bancshares To PNC For $11.6 Bln

(RTTNews) - Shares of Banco Bilbao Vizcaya Argentaria, S.A. were gaining around 16 percent in the morning trade in Spain after the financial services group agreed to sell BBVA USA Bancshares, Inc., including its U.S. banking subsidiary, BBVA USA, to PNC Financial Services Group, Inc. in $11.6 billion cash deal.

In the pre-market activity on the NYSE, BBVA shares were up 16 percent, and PNC shares were up 1.8 percent.

In a statement, PNC said the acquisition will will significantly accelerate its national expansion strategy and create nation's 5th largest bank by asset size.

PNC expects the deal to be around 21 percent accretive to earnings in 2022 and to substantially replace the net income benefit from PNC's passive equity investment in BlackRock that was divested in May 2020.

The deal has been approved by both companies' boards of directors, and is expected to close in mid-2021, subject to customary closing conditions, including regulatory approvals.

The purchase price will be funded with cash on hand in a fixed price structure.

Following the deal closure, BBVA USA Bancshares will be merged into PNC with PNC continuing as the surviving entity.

BBVA USA will be merged into PNC Bank, N.A. and BBVA USA customers will be converted to the PNC platform with BBVA USA branches assuming the PNC Bank name.

The acquisition excludes BBVA Securities, Inc., Propel Venture Partners Fund I, L.P. and BBVA Processing Services, Inc.

Houston, Texas -based BBVA USA Bancshares holds $104 billion in assets. It provides commercial and retail banking services through its banking subsidiary BBVA USA and operates 637 branches in Texas, Alabama, Arizona, California, Florida, Colorado and New Mexico.

Following the combination with PNC's existing footprint, there will be a coast-to-coast franchise with a presence in 29 of the 30 largest markets in the U.S.

PNC expects to incur merger and integration costs of $980 million, inclusive of approximately $250 million in write-offs of capitalized items. It will also achieve cost savings in excess of $900 million.

In the transaction, Bank of America, Citi, Evercore and PNC Financial Institutions Advisory acted as financial advisers to PNC. J.P. Morgan Securities plc represented BBVA as financial adviser.

In Spain, BBVA shares were trading at 3.70 euros, up 16.45 percent.