PNC acquires Spain’s BBVA U.S. operations for $11.6B

The PNC Financial Services Group, Inc. (PNC), one of the largest diversified financial services institutions in the United States, announced Monday that the company has signed a definitive agreement with the Spanish financial group, Banco Bilbao Vizcaya Argentaria, S.A.  (BBVA) to acquire BBVA USA Bancshares, Inc., including its U.S. banking subsidiary BBVA USA.

The Pittsburgh-based PNC will acquire BBVA USA for a purchase price of $11.6 billion to be funded with cash on hand in a fixed price structure. The transaction, which has been approved by both companies’ boards of directors, is expected to close mid-2021.

PNC expects the transaction to be approximately 21 percent accretive to earnings in 2022 and to substantially replace the net income benefit from PNC’s passive equity investment in BlackRock that was divested in May 2020. The transaction has an estimated internal rate of return to PNC in excess of 19 percent.

“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,” said William S. Demchak, PNC’s chairman, president and chief executive officer.

BBVA USA Bancshares is headquartered in Houston, Texas, and has $104 billion in assets. It provides commercial and retail banking services through BBVA USA, operating 637 branches in Texas, Alabama, Arizona, California, Florida, Colorado, and New Mexico. When combined with PNC’s existing footprint, the company will have a coast-to-coast franchise with a presence in 29 of the 30 largest markets in the United States.

“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,” Demchak said.

Post-closing, PNC intends to merge BBVA USA into PNC Bank, N.A. and convert BBVA USA customers to the PNC platform with BBVA USA branches assuming the PNC Bank name. PNC is not acquiring BBVA Securities, Inc., Propel Venture Partners Fund I, L.P. and BBVA Processing Services, Inc.