France's BPCE has agreed to acquire Portugal's Novo Banco for 6.4 billion euros, which includes a 75% stake previously held by U.S. private equity firm Lone Star.

This acquisition signifies the completion of Novo Banco's transformation into one of Europe's most profitable banks, targeting a medium-term Return on Tangible Equity exceeding 20%.

Nicolas Namias, BPCE's CEO, emphasized the bank's commitment to supporting the Portuguese economy, particularly small and medium-sized enterprises (SMEs).

BPCE plans to leverage Novo Banco's extensive customer base and its own expertise to enhance service offerings and expand its presence in the Portuguese market.

Novo Banco operates nearly 300 branches and employs over 4,200 staff, making it a significant player in the Portuguese banking sector.

Under Lone Star's management, Novo Banco has improved its financial profile and customer experience, becoming the preferred bank for SMEs in Portugal.

Namias assured that there will be no layoffs as a result of the acquisition, with employment expected to increase significantly.

The acquisition is viewed as a strategic opportunity to integrate Novo Banco into one of Europe's largest financial groups, enhancing its role in supporting the Portuguese economy.

BPCE's management considers this acquisition crucial for supporting the European economy and advancing banking consolidation in Europe.

This deal marks the largest cross-border banking transaction in Europe in recent years, positively impacting both the banking union and the French banking system.

The Portuguese State will receive 733.4 million euros from the sale, while the Resolution Fund will receive 866.6 million euros.

BPCE's successful bid for Novo Banco surpassed that of Spain's CaixaBank, securing the deal and positioning BPCE for further growth in the region.