Spanish state-owned lender Bankia has agreed to acquire another local nationalised lender Banco Mare Nostrum (BMN) in an all-stock transaction worth €825m.
Under the arrangement, Bankia will conduct a “merger by absorption”, issuing 205.6 million new shares to shareholders of BMN.
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Both Bankia and BMN were bailed out during the financial meltdown after facing losses on property loans.
Fund for Orderly Bank Restructuring (FROB), the bank bailout fund that serves as the main shareholder of the two banks, will own nearly 66.56% of the merged entity.
Existing private shareholders of Bankia will hold a 31.11% stake in the combined group, while BMN’s private shareholders will own the remaining 2.33% stake.
Bankia expects the deal to increase its earnings per share by 16% after three years and deliver synergies of €155m.
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By GlobalDataBankia chairman Jose Ignacio Goirigolzarri said: “After successfully completing its restructuring process, Bankia is now ready to embark on a new stage of growth, in which the integration of BMN is tremendously positive because it allows us to build out our franchise in some areas of strong growth in which we had a very limited presence.”
The transaction is subject to shareholder and regulatory approvals.
BMN chairman Carlos Egea added: “The merger is good for our shareholders, employees and customers, as BMN will be joining the country’s fourth largest financial group, which is also its most solvent, most efficient and most profitable.”
