Groupe BPCE to take over Portuguese lender Novo Banco

(Sharecast News) - French lender Groupe BPCE is to take over Portugal's fourth-largest bank Novo Banco for an estimated €4.8bn, snapping up the remaining 75% it doesn't already own. Groupe BPCE, the second-largest lender in France, has signed a memorandum of understanding for the acquisition of a 75% equity interest from private equity firm Lone Star Funds.

The deal values the business at €6.4bn, at a multiple of around nine times annual earnings.

According to the French lender, this represents the biggest cross-border acquisition in the eurozone for more than a decade.

The acquisition is part of Groupe BPCE's 'Vision 2030' strategic plan, "geared to developing and diversifying BPCE in France, Europe and the wider world".

Buying Novo Banco, which holds a 9% share of the retail banking market, would mean Portugal becomes Groupe BPCE's second-largest domestic retail market. Novo Banco also holds a 14% share of the corporate banking sector, with a €17bn corporate loan book.

Nicolas Namias, chief executive of BPCE, said the deal would allow the company to "actively participate in financing the Portuguese economy".