Santander: buys troubled rival Popular for symbolic euro.
(CercleFinance.com) - Spanish bank Banco Santander said on Wednesday that it would buy troubled rival Banco Popular, which sent the shares down in Madrid in early trading today.
The acquisition took place following an auction in which Santander was selected as the successful bidder, paying a symbolic price of 1 euro.
However, Santander plans to launch a rights issue for a total amount of 7 billion euros, which will cover the capital and provisions required to strengthen Banco Popular's balance sheet.
Press comments suggest that Santander was left as the only bidder for Banco Popular, whose liquidity position has worsened recently and which needed a way to address its balance sheet issues.
In Spain the bank will become the leading bank - both in terms of lending and deposits - serving over 17 million customers.
The combined business, which will operate under the Santander brand name, will have a 25% market share in small and medium-sized business (SME) lending in Spain - a key driver of economic growth for the country.
The acquisition is expected to generate a return on investment of 13% to 14% in 2020, with EPS growth in 2019, Santander said.
The shares were down 2.2% at under 5.7 euros this morning, weighing on the IBEX 35 index, which is down 0.6%, while the trading of Banco Popular shares has been suspended.
Copyright (c) 2017 CercleFinance.com. All rights reserved.
The acquisition took place following an auction in which Santander was selected as the successful bidder, paying a symbolic price of 1 euro.
However, Santander plans to launch a rights issue for a total amount of 7 billion euros, which will cover the capital and provisions required to strengthen Banco Popular's balance sheet.
Press comments suggest that Santander was left as the only bidder for Banco Popular, whose liquidity position has worsened recently and which needed a way to address its balance sheet issues.
In Spain the bank will become the leading bank - both in terms of lending and deposits - serving over 17 million customers.
The combined business, which will operate under the Santander brand name, will have a 25% market share in small and medium-sized business (SME) lending in Spain - a key driver of economic growth for the country.
The acquisition is expected to generate a return on investment of 13% to 14% in 2020, with EPS growth in 2019, Santander said.
The shares were down 2.2% at under 5.7 euros this morning, weighing on the IBEX 35 index, which is down 0.6%, while the trading of Banco Popular shares has been suspended.
Copyright (c) 2017 CercleFinance.com. All rights reserved.