BPCE Group to acquire Portugal's Novo Banco

France's BPCE Group has agreed to acquire Portugal's fourth-largest bank Novo Banco, including the 75% stake held by U.S. private equity fund Lone Star, in a deal valued at 6.4 billion euros ($7.4 billion), the parties said on Friday, as cited by Reuters.

The Portuguese state and a bank resolution fund financed by the country's banks, which hold 11.5% and 13.5% of Novo Banco respectively, said separately that they had also agreed to sell their stakes to BPCE.

As of March 31, 2025, Novo Banco had deposits of 30 billion euros and net loans of 28.5 billion euros, equivalent to a 9% market share in Portugal. The bank has almost 300 branches and more than 4,200 employees.

BPCE expects the deal to close in the first half of 2026.

The Novo Banco acquisition comes amid a wave of cross-border and domestic bank mergers in Europe, where regulators have long urged industry consolidation to better integrate the financial sector and counter growing competition from U.S. banking giants.

"I believe this acquisition is fully in line with the ECB's call to strengthen the European banking system,” BPCE Chief Executive Nicolas Namias said, noting that the takeover would allow the French bank to become a player in the retail banking segment of the European banking sector.

BPCE's cash acquisition of Novo Banco would give the French bank a second significant retail market outside France, where two major banking groups currently operate.

"This is the largest cross-border transaction in Europe in recent years. I think it is very good news for both the banking union and the French banking system,” said Banque de France Governor Francois Villeroy de Galhau.

Novo Banco was created in 2014 after the state provided a support package to the lender Banco Espirito Santo, which was facing financial difficulties, and Lone Star paid one billion euros for its 75% stake in 2017.

Consolidation activity has resumed in the European banking sector, Reuters notes. In Spain, BBVA announced a hostile bid of more than 14 billion euros for rival Sabadell, while the CEO of Italian banking group UniCredit SpA, Andrea Orcel, announced his intention to acquire German bank Commerzbank and Italian bank Banco BPM, provoking strong reactions in both Berlin and Rome.