CaixaBank and Bankia: details of the merger transaction
Spanish banks CaixaBank and Bankia have reached the final stage of merger negotiations. The goal of the financial corporations is to create the largest institution in the country. According to the agreement, CaixaBank will absorb Bankia, which is smaller in size. The shareholders of the latter will get 0.68 shares of CaixaBank for each paper.
After the merger, the new financial institution will have assets amounting to 650 billion euros. According to these figures, it will take third place among Spanish banks, the leaders are Santander and Bilbao Vizcaya Argentaria. And the new company will take first place in terms of domestic assets, as other institutions operate not only in Spain, and some operations are conducted at the international level.
According to analysts’ estimates, the benefit from the consolidation of banks will amount to 770 million euros annually. The share of 16% of the merger will belong to the Spanish government. Closing of the deal is planned for the next two months. The market value of CaixaBank at last week’s auction was 12.2 billion euros, and Bankia – 4.4 billion euros. It should be noted that financial institutions were able to withstand during the pandemic and the crisis, which it caused, but suffered financial losses. Their capitalization decreased by about 25%.
The company CaixaBank in this version, as it is now, was founded in 2011, the main office is located in Barcelona. The staff consists of more than 32 thousand people, working in 5228 representative offices throughout the country and serving almost 14 million customers.
The history of the institution began in 1994, when the company La Caixa acquired Banco de Europa, which was owned by Carlos Ferrera. In 2007, the latter bank became an auxiliary division of La Caixa, which deals with microcredit.
After reviewing the investment portfolio in the same year, the management decided to create a new subsidiary company, which will specialize in investments in the industrial sector. This holding included shares of various companies, among which were Gas Natural, Invercaixa Gestión and others. Along with industrial corporations, it included the securities of international banks.
In 2011, the holding revised its activities, a number of divisions were merged and the company was renamed into CaixaBank. The reorganization became a necessity against the background of new rules of the Spanish government, which strengthened the regulation of the banking segment.
In 2012 CaixaBank absorbed Banca Civica with the liquidation of the latter’s brand. In the same year, the companies transferred to Banco de Valencia.
CaixaBank is an influential financial holding company, which after the new merger will help strengthen its position in the Spanish market.