PNC Financial Services confirmed this morning that it would buy the US arm of Spanish bank BBVA in one of the largest mergers in the sector in recent history.
The deal will see the Pittsburgh-based company splash out $11.6bn (£8.8bn) for BBVA’s assets, creating a bank with around $560bn in assets.
As a result of the deal, which has been in the offing for several weeks, PNC will now offer services in more than two dozen states.
The company said that the acquisition would add an extra 21 per cent to its yearly earnings.
The deal is an example of how a loose regulatory framework under President Donald Trump has encouraged smaller banks to take on national players through dealmaking.
Although Joe Biden will become the next president, a Republican-controlled Senate will make it hard to unwind his predecessor’s slashing of red tape, encouraging PNC and BBVA to go ahead.
For BBVA, the deal represents the end of a journey in the US which began when it bough Compass Bancshares for $9.6bn in 2007.
But the subsidiary’s poor performance has seen the stock slip 36 per cent this year, leading BBVA to seek an exit from the market.
PNC has traditionally focused its operations on the mid-Atlantic and Rust Belt markets, but the purchase will allow it to expand into Sun Belt states such as Arizona and New Mexico.
The deal, which is the second-biggest banking merger since 2008, is expected to close in mid-2021.
It is only surpassed in scale by the mega-merger of BB&T and Sun Trust Banks for $28bn last year.