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Name | Symbol | Market | Type |
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Sg Issuer 26 | LSE:86KM | London | Medium Term Loan |
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RNS No 3033c BANCO BILBAO VIZCAYA SA 19 October 1999 BBV AND ARGENTARIA AGREE ON THEIR MERGER This morning both the Boards of Directors of BBV and Argentaria have recommended a merger project between the two institutions which will result in the creation of "Banco Bilbao Vizcaya Argentaria, S.A (BBVA)" the leading financial institution in Spain and Latin America. CREATION OF THE #1 SPANISH BANKING GROUP IN TERMS OF MARKET CAPITALISATION AND EARNINGS AND ONE WITH THE HIGHEST MARKET CAPITALISATION IN THE EUROZONE The new financial group ranks first in Spain in terms of market capitalisation and earnings An extract of the relevant pro forma financial indicators of Banco Bilbao Vizcaya Argentaria is as follows: Billions of Ptas. Market value 6,183 Assets 37,657 Customer deposits 16,979 Loans 17,961 Mutal funds 7,978 Pension funds 4,362 Capital base 2,406 Equity 1,479 # of shareholders (000's) 1,310 % ROE 20.2 NPls ratio 2.0 Loan loss coverage ratio 126 Efficiency ratio 54.3 BBVA will benefit from an excellent level of diversification both geographically and in terms of business mix and from a strong market position, in the geographical areas where it is represented. In Spain, the new group will have a market share of 17% in deposits, 20% in loans, 20% in funds under management and 20% in pension funds. However, BBVA will have only 4,357 in Spain, representing 12% of the total number of branches. The new group will also have a more extensive and better balanced presence in Latin America as it owns: a) A substantial banking network, of more than 2,200 branches, with leading market shares (Appendix 2) b) A comfortable leadership position in the pension funds business, where it has 10 million customers and manages assets of more than Ptas 3.1 billion (Appendix 3) BALANCE, INTEGRATION AND UNITY OF COMMAND, AS PRINCIPLES OF THE BBV ARGENTARIA MERGER The merger project approved today targets expansion and is driven by: Balance, Integration and Unity of Management STRUCTURE OF THE TRANSACTION * Company name: The new entity will be named Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) * Form: "merger of equals" * Exchange ratio: The transaction will be implemented through the exchange of 5 newly issued BBV shares for each 3 Argentaria shares, based on the respective market capitalisations on the day of announcement * Structure: In order to benefit from the most efficient formula from a legal and tax stand-point, the merger is being structured in such way that Argentaria will be incorporated into BBV * Headquarters: The new entity will be legally based in Bilbao with operating headquarters both in Madrid and Bilbao * Earnings impact: The shareholders of both institutions will benefit form earnings accretion from day one, and from further significant and sustained improvement over the next 3 years, which could reach 94%. CAPITAL TRANSACTIONS AND OUTSTANDING FIANCIAL STRENGTH The Boards of Directors of BBV and Argentaria have agreed to pay in advance the dividends related to the 1999 income, so that the shares receive equal economic rights from January 1st 2000. The merger will be implemented through a BBV capital increase on the basis of the exchange of 5 BBV shares for each 3 Argentaria shares. The number of newly issued shares will be 817.3 million, which, added to the 2,113.2 million current outstanding shares as of September 30th 1999, will make a total of 2,930.5 million BBV shares. The initial capital base of Ptas 2.4 billion provides the new BBVA Group with remarkable financial strength that will allow it to implement significant expansion projects. The capital surplus of the new group amounts to Ptas 655 billion. Moreover, Banco Bilbao Vizcaya Argentaria will have Ptas 685.2 billion of unrealised capital gains in its industrial portfolio (excluding gains from other assets). A DEMANDING TIMETABLE Today's approval of the transaction by the Board of Directors of each comapny will be followed by a General Shareholders' meeting scheduled for late 1999. The merger will have economic effect from January 1,2000. This operation will also encompass US investors. It is anticipated that the shares of the new Banco Bilbao Vizcaya Argentaria, S.A (BBVA) will commence trading in January 2000, although this timetable is subject to approval by the competent authorities, including the US SEC (Securities Exchange Commission). EIGHT STRATEGIC OBJECTIVES FOR BBVA The Boards of Directors of Banco Bilbao Vizcaya and Argentaria have established eight strategic objectives to reinforce the new entity's capacity to create value: 1) High return 2) High solvency 3) Better efficiency 4) Adequate size 5) Technology, as an opportunity 6) Leading competitive position 7) Diversification 8) Low risk profile These eight objectives form a corporate project, and, with clear leadership, are the expression of the new entity's commitment to value creation and demanding management criteria. Given the position and global orientation of Banco Bilbao Vizcaya Argentaria S.A., the Boards of Directors of both merging groups express their intention to open this project to other European institutions. CORPORATE GOVERNANCE The governing bodies of the new entity will be formed as follows, in the initial period: Executive Chairmen: Emilio Ybarra and Francisco Gonzalez Vice-Chairman and CEO: Pedro Luis Uriarte Board of Directors: Composed of the Boards of BBV (19 members) and Argentaria (14 members). The first vacancy will be cancelled. The basic distribution of responsibilities between the two chairmen during the transition period will be the following: * Emilio Ybarra will chair the General Meeting and the Board of Directors * Francisco Gonzalez will chair the Executive Committee * Emilio Ybarra and Francisco Ganzalez will co-chair the Management Committee, under the direction of the Vice-Chairman and CEO. The Board of Directors, in order to optimise its role, will be assisted by an Executive Committee composed of 13 members, 8 of which will come from BBV and 5 from Argentaria. The first vacancy will be cancelled. In addition to the vice chairmanship held by the CEO, the Board will have 3 Vice Chairmen: Gervasio Collar, Jose Domingo Ampuero and Jesus Maria Carnzos. Chairman Emilio Ybarra will remain a member of the Board of Directors and of its Executive Committee after he reaches the statutory age (expected to be at the General Meeting to be held in the early 2002). At that time Chairman Francisco Gonzalez will take on the sole Chairmanship of Banco Bilbao Vizcaya Argentaria, S.A. In conclusion, the newly created Banco Bilbao Vizcaya Argentaria, S.A. will be the leading bank in Spain and Latin America which will take the best features of the two merged partners with the ambition to develop into one of the most important banking institutions in Europe. END MSCNFPENFADNFFN
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