NEW YORK (AP) — PNC Financial Services Group Inc. said Monday it is buying the U.S. subsidiary of Spain's BBVA bank for $11.6 billion in cash.
BBVA's U.S. operations, which are based in Houston, Texas, have $104 billion in assets and operate 637 branches, mainly in the south and southwest of the country.
"Our acquisition of BBVA USA will accelerate our growth trajectory and drive long-term shareholder," said William Demchak, PNC's president, chairman and CEO.
PNC, based in Pittsburgh, Pennsylvania, is largely a regional bank and the deal would give it a presence across the U.S. Mergers and acquisitions of big banks have declined greatly since the financial crisis in 2008. Regional banks face stiffer competition now from big national banks and have been hurt more than larger banks by low interest rates.
Shares in BBVA jumped more than 15% in Madrid on Monday. PNC's shares closed up almost 3% on Wall Street.
The president of BBVA, Carlos Torres Vila, said the price of the deal was high, at about 2 1/2 times the level analysts had valued the U.S. unit.
"The price represents almost 50% of BBVA's market capitalization, for a business that generates less than 10% of our profit," he said.
The deal was approved by both sides and would close by the middle of next year.