PNC Financial Services Group is to buy the US arm of Spanish banking giant BBVA for $11.6 billion, the companies announced this morning.
The deal will make PNC the fifth-largest bank in the US with more than $500 billion in total assets.
The purchase will be paid for in cash in a “fixed price structure”, PNC said, using some of the proceeds of the sale of its stake in BlackRock, the world’s largest asset manager, which it announced in May.
BBVA USA, headquartered in Houston, Texas, has $104 billion in assets and 637 branches across seven states. As of September 30, BBVA USA had $86 billion of deposits and $66 billion of loans.
PNC’s chairman, chief executive and president William Demchak 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.”
BBVA Group executive chairman Carlos Torres Vila added that the deal was “very positive” for both banks.
“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,” he said.
PNC said it expected the acquisition to cost $980 million in “merger and integration costs”, but achieve cost savings “in excess of $900 million”.
The transaction is expected to close in mid-2021, subject to regulatory approval.
In August, BBVA USA was highlighted by Greenwich Associates as a standout performer in the middle market sector during the Covid-19 pandemic. The bank was also praised for its digital capabilities in a March report from Juniper Research.
Also in August, the bank was announced as one of eight financial services companies to have partnered with Google Pay to facilitate digital checking accounts.