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Bancomer Board Of Directors Approves Merger With Spain's Banco Bilbao Vizcaya Argentaria

LADB Article ID: 53846
Category/Department: Mexico
Date: 2000-06-14
By: LADB Staff

In mid-June, the board of directors of Grupo Financiero Bancomer (GFB) unanimously approved a merger with Spain's Banco Bilbao Vizcaya Argentaria (BBVA), thereby rejecting similar overtures from Mexican rival Grupo Financiero Banamex- Accival (Banacci). BBVA won the bid by sweetening its offer for GFB to US$1.4 billion from the original bid of US$1.2 billion submitted in March (see SourceMex, 2000-03-15). Under the revised bid, BBVA could add another US$1.1 billion to the deal through future debt issues and capital injections. "The board's recommendation is the best option for GFB from a strategic and value-creation point of view," said Bancomer president Ricardo Guajardo in comments to banking- industry analysts. The ownership proportion remains unchanged from the March bid, with Bancomer shareholders receiving a 70% share of the merged company. BBVA plans to eventually acquire another 10% share from the Bancomer shareholders. BBVA sources said Bancomer's current foreign partner, the Bank of Montreal, will probably not participate in the merged institution. The Canadian bank owns about 16.6% of GFB. The Spanish bank plans to take administrative control of the new institution, although Guajardo will remain as president of the merged bank.

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