Banco Santander's proposed acquisition of Banco Popular Español has secured approval from the European Commission (EC).
The commission said the transaction would not raise competition concerns in the European Economic Area (EEA).
EC has studied the impact of the deal on the markets for retail and corporate banking, leasing, factoring and the provision of ATM services in the Portuguese and Spanish national and regional markets.
Both financial entities offer commercial, retail investment and wholesale banking services, as well as insurance services for the customers in Spain and Portugal.
Banco Popular, which was on the verge of collapse, was bought by Santander for a nominal sum of €1. Without any support from taxpayer money, Banco Popular’s resolution will be concluded as a result of its acquisition.
On 6 June, the European Central Bank (ECB) declared that Banco Popular was either failing or likely to fail owing to its recent liquidity situation.
According to Santander, the merging of Banco Popular into it will create the largest bank in Spain, both in terms of lending and deposits while having a customer base of 17 million.
The two banks will have a consolidated customer base of more than four million in Portugal.
In Spain, the combined business to be run under the Santander brand will enjoy a market share of 25% in SME lending.
Banco Santander, which mainly operates in Spain, provides services in other European countries such as Portugal and the UK, as well as Latin America and the US.
Image: Banco Popular headquarters in Madrid, Spain. Photo: courtesy of Luis García (Zaqarbal)/Wikipedia.org.