BPCE to bag Portugal's Novo Banco in largest eurozone bank deal in decade

LISBON, June 13 (Xinhua) -- Portugal's fourth-largest bank, Novo Banco, is set to be acquired by French financial group BPCE, marking the eurozone's biggest cross-border banking acquisition in over a decade.

Novo Banco's majority shareholder, the American private equity firm Lone Star Funds, has signed a memorandum of understanding with BPCE to sell its 75 percent stake in the bank for an estimated 6.4 billion euros (7.52 billion U.S. dollars). The deal is expected to close in the first half of 2026, subject to regulatory approval.

According to local media, Novo Banco said in a filing to the Portuguese Securities Market Commission that its two minority shareholders, the Portuguese Ministry of Finance and the country's bank resolution fund Fundo de Resolucao, are also in negotiations with BPCE to sell their stakes under the same terms.

For Lone Star, the deal represents a remarkable return. The firm, which invested 1 billion euros in Novo Banco in 2017, is set to earn approximately 4.8 billion euros from the sale. When combined with 1 billion euros in dividends received over the years, the investment will have yielded nearly a sixfold return.

BPCE described the acquisition as "the largest cross-border acquisition in the eurozone in more than 10 years." However, it emphasized that it would retain the Novo Banco brand and its current workforce, with no planned layoffs or operational restructuring.

According to earlier media reports, BPCE faced strong competition from Spain's CaixaBank. However, the BPCE deal received backing from the Portuguese government, with Finance Minister Joaquim Miranda Sarmento publicly stating that he does not wish to see further concentration of Spanish banks in the Portuguese market. Enditem