Banco Bilbao Vizcaya Argentaria (BBVA), Spain's second-largest bank, has extended its retail banking business in the US following an agreement to buy Texas Regional Bancshares for $2.16 billion.
The Basque bank will pay $38.90 per share for Texas Regional, while shareholders in Texan bank may receive a special dividend of up to 10 cents per share, according to reports from the Financial Times.
The acquisition of Texan Regional, which has 73 branches in Texas and about $6.6 billion in assets, will boost BBVA’s presence in the US where it already owns Bancomer, one of Mexico’s largest banks.
Francisco Gonzalez, BBVA’s chief executive said the success of the large Bancomer franchise made the group realize the potential of reaching the whole country.
The large population of Mexican-Americans in Texas may have also made the state an attractive option for BBVA. In an interview published by the Financial Times, Mr Gonzalez said that BBVA could provide more services to the Hispanic community than its US competitors, thanks to its Mexican franchise.
We are in this country today because we are very successful in Mexico. We realized a couple of years ago that having in Bancomer such a large franchise in Mexico, we had an opportunity to reach out to this country, Mr Gonzalez added.
The purchase of Texas Regional follows BBVA’s $850 million acquisition of Laredo National in 2004.
US financial services providers Citigroup and Capital One have also been buying up banks with branches in states with a large Hispanic presence including Texas, Florida and California.
Texas Regional shares have been rising for weeks in expectation of a deal and they grew more than 10% to $37.80 per share when the deal was finally announced.