Bankia, Spain’s fourth largest bank, has agreed purchase Banco Mare Nostrum (BMN) in a 7.8 for 1 share swap deal, valuing BMN at €825 million, reports euronews.com.
When the housing bubble burst in 2008 the number of lenders in Spain fell from 55 to only 13, leading to a five year economic slump. Both Bankia and BMN were nationalized following the economic crisis in a bailout worth €24 billion; the state owns around 66% of Bankia and 65% of BMN.
Bankia will issue a maximum of 205.7 million new shares to help finance the deal, a move which will increase earnings per share by 16% after three years and would be positive after one year, Bankia said in a statement to the market regulator.
Bankia’s shares rose by nearly 3% following the announcement of the deal; the deal should be finalised by the end of the year.
Tags: Bankia, Banking Spain, BMN