Banco Bilbao Vizcaya Argentaria (BBVA) M&A Announcement (Media) summary

Deal rationale and strategic fit

• Consolidation creates a leading European bank with greater scale to address industry challenges, digital transformation, and economic growth.

• Enhanced market position in Spain and Europe, with complementary business lines and improved support for SMEs, enterprises, and households.

• Expanded network, product offering, and global reach, with strong commitments to key regions and credit volumes.

• Scale enables more efficient investment in technology, digitization, cybersecurity, and AI.

• Strategic rationale strengthened by increased European investment and the need for larger banks.

Financial terms and conditions

• Offer: 1 newly issued share for every 5.5483 shares of the target, plus €0.70 in cash per share, subject to acceptance of over 50% of voting rights.

• Offer value is €17.4 billion, the highest valuation for the target in over a decade, and has increased by 43% since April 29, 2024.

• Target shareholders will hold 13.6% of the combined entity.

• Offer premiums: 30% over 1-day, 42% over 1-month VWAP, and 50% over 3-month VWAP as of April 29, 2024.

Synergies and expected cost savings

• Annual pre-tax synergies of €900 million, including €510 million in opex and €325 million in personnel cost savings.

• Synergies equivalent to 13.5% of the combined cost base, with €1.45 billion in restructuring costs, mostly booked in the year of the merger.

• Full synergy realization expected by 2029, with a one-year delay due to regulatory conditions and phased in over four years post-merger.