France's BPCE Buys Novo Banco in $7.4 Billion Deal
The French banking group BPCE will acquire Portugal’s Novo Banco through a €6.4 billion ($7.4 billion) deal which represents one of Europe's biggest cross-border banking transactions in recent times. BPCE will acquire the 75% stake of Lone Star as well as all shares belonging to the Portuguese state and the national banking resolution fund.
The acquisition establishes BPCE as a major retail banking force outside French borders while supporting European regulatory demands for banking sector consolidation. The acquisition aligns with the ECB's goal to enhance European banking integration according to BPCE CEO Nicolas Namias.
The new bank Novo Banco emerged in 2014 after Banco Espírito Santo failed and Lone Star bought its controlling stake for €1 billion in 2017. The sale includes the transfer of all public entity shares that remain in the company.
The European banking union received a positive assessment from France's central bank chief François Villeroy de Galhau who described this transaction as a major advancement. The acquisition occurs during a period when banks perform domestic and international mergers to enhance their competitive position against major worldwide competitors.
The integration of Novo Banco will enhance BPCE's strategic presence throughout the Iberian Peninsula.
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