PNC To Buy Spanish Bank BBVA's US Unit In $11B Deal

PNC Financial Services Group Inc PNC announced late Sunday it has agreed to absorb Spanish bank Banco Bilbao Vizcaya Argentaria SA’s BBVA U.S. business in an $11 billion all-cash deal.

What Happened: BBVA USA's operations amount to $104 billion in assets and the sale will raise proceeds of over $11 billion for the bank, the two companies said in a joint statement.

Currently, BBVA U.S. has a presence in Alabama, Arizona, California, Colorado, Florida, New Mexico, and Texas.

The acquisition agreement would consolidate $500 billion assets into one financial institution, catapulting PNC to the fifth spot among retail banking giants in the U.S., as per the Wall Street Journal, which earlier reported that PNC and BBVA were in advanced discussions for the acquisition deal.

The Journal speculated that PNC could fund the acquisition through the sales proceeds of its BlackRock Inc BLK stake. PNC had shed 31.6 million Blackrock earlier this year in May for collective proceeds of $14.37 billion.

Why Does It Matter: The acquisition is in line with PNC CEO William Demchak’s objective of growing the company’s national presence. In June, Demchak said in a CNBC interview that PNC’s capital resources could be deployed to acquire another bank.

Price Action: PNC shares closed Friday at $122.78, 1.47% higher. Whereas, BBVA quoted 5.06% higher at $3.74.

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