Caixabank Values Bankia At 4.3 Billion Euros In Deal To Become Biggest Spanish Bank

Lenders will have a combined valuation of more than 16 billion euros, they said.

Banks across Europe are struggling to cope with record low interest rates and the economic downturn sparked by the COVID-19 pandemic, leading analysts to predict more tie-ups to cut costs.

The deal has been described as a merger, but it is in effect a takeover by Caixabank as it is almost three times as big as Bankia in terms of market value and almost two times by assets.

The agreement consists of an exchange ratio of 0.6845 new Caixabank ordinary shares for every Bankia share and includes a 20% premium over the exchange ratio at the closing of September 3, before news first emerged of the deal, the lenders said.