Spain’s Unicaja and Liberbank are reportedly planning to finalise their proposed merger this week or before the end of this year.

The merger is expected to create the fifth-largest bank in the country, Reuters reported citing three sources familiar with the matter.

One of the three sources said: “Negotiations on the financial terms of the proposed deal are at an advanced stage and could be finalised as soon as next week or before the end of the year.”

According to two sources, this week, the lenders regularly held board meetings, but did not make any decision to finalise the merger, the report added.

One source added that an extraordinary board meeting could be held “at any moment” from Monday, 21 December 2020, to decide on the terms of the proposed deal.

Moreover, this source did not rule out the possibility of merger extending into early 2021 and said that some final deal terms were still being discussed.

The third source added that the banks are currently discussing an all-share exchange ratio.

The source pointed out that Unicaja will own 59% stake in the combined entity, and both the lenders will need to ink the agreement on the final ratio.

Unicaja will own a 58.5% stake in the combined company, based on the current market valuation, while Liberbank will hold the remaining 41.5% stake.

Unicaja has €62bn ($75.66bn) in assets and €1.14bn in market value. Whereas, Liberbank has €46.8bn ($57.11bn) in assets and a market cap of €810m.

The two banks already held merger talks last year, which failed because the banks could agree to the share swap ratio.

Recent deals

Earlier this month, Bankia shareholders gave the go-ahead to Bankia’s proposed merger-takeover by Spanish lender CaixaBank.

Spanish lenders Banco Sabadell and BBVA terminated their merger negotiations as they could not reach an agreement over the price.

Banco Santander has agreed to acquire highly specialised technology assets from the European merchant payments business of insolvent payments firm Wirecard.