The board of directors at Bankia has decided to enter into a business integration agreement with BMN.
Under the agreement, the Spanish bank will carry out a merger by absorption of BMN that will create one of the largest banks in the region.
The transaction will be implemented through the delivery of 205.6 million newly issued shares of Bankia to the shareholders of BMN, which entails valuing BMN at €825m.
The shareholders of BMN will hold 6.7% of Bankia’s capital after the merger has been completed.
They will then be the owners of liquid shares which are listed on the stock market and which pay a dividend that has been growing since it was first paid in July 2015.
“After successfully completing its restructuring process, Bankia is now ready to embark on a new stage of growth, in which the integration of BMN is tremendously positive because it allows us to build out our franchise in some areas of strong growth in which we had a very limited presence,” said José Ignacio Goirigolzarri, chairman of Bankia.
“The merger is very good for all of Bankia’s shareholders because of the value creation it entails.
“And it is very good news for the taxpayers because the union of the two institutions increases the capacity to repay the aid received.”
Bankia and BMN will apply to the Companies Registry in Valencia to appoint an independent expert to approve the merger plan.
Once approval is received, shareholders will be able to approve the merger before the banks seek the necessary authorisations from the various regulators, supervisors and authorities.
“The merger is good for our shareholders, employees and customers, as BMN will be joining the country’s fourth largest financial group, which is also its most solvent, most efficient and most profitable,” said Carlos Egea, chairman of BMN.
Carlos added that this is the best way to “continue being useful to households and businesses in the regions in which we are based, where the merged bank will give customers access to a new range of products and services, as well as more advanced commercial practices”.
Both banks offer business banking services to SMEs and the self-employed through a number of specialist products.
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