Lone Star has finalized a deal with French banking group BPCE to sell Novo Banco for a total valuation of €6.4 billion, securing 100% of the share capital. Discover the implications of this significant transaction in the banking sector.
In a significant development in the European banking sector, Lone Star Funds has announced its agreement to sell Novo Banco to the French banking group BPCE. This strategic transaction, valued at approximately €6.4 billion for 100% of Novo Banco’s share capital, marks a pivotal moment for both institutions and the Portuguese banking landscape.
Details of the Transaction
According to a statement released by Novo Banco, the majority shareholder, Nani Holdings S.à r.l. (an entity owned by Lone Star Funds), has signed a Memorandum of Understanding with BPCE. The deal is expected to close in the first half of 2026, following a thorough regulatory review and completion of necessary procedures.
The announcement was made to the Portuguese Securities Market Commission (CMVM), highlighting the strategic importance of this sale. The decision to sell directly to BPCE is seen as a move that will enhance Novo Banco’s position within one of Europe’s largest and most robust financial groups.
Strengthening the Portuguese Economy
The integration of Novo Banco into BPCE is anticipated to bolster the bank’s role in supporting the Portuguese economy. With BPCE’s established banking networks, including Banque Populaire and Caisse d’Epargne, Novo Banco is poised to leverage these resources to enhance its service offerings and expand its market presence.
Novo Banco has expressed that this transaction completes its transformation process, positioning it as one of the most profitable banks in Europe. The bank aims for a medium-term return on tangible equity (RoTE) objective of over 20%, signaling its commitment to delivering value to shareholders and customers alike.
A Brief History of Novo Banco
Novo Banco was established in 2014 as part of the resolution of Banco Espírito Santo (BES), taking over a portion of its banking activities. Since its acquisition by Lone Star in 2017, Novo Banco has undergone significant restructuring and has received substantial financial support from the Resolution Fund, amounting to €3.405 billion. This support has been a subject of political and media scrutiny, but it has also paved the way for the bank’s recovery and growth.
With the anticipated end of the Resolution Fund’s support in late 2024, the sale to BPCE not only marks a new chapter for Novo Banco but also allows for the distribution of dividends, making the bank more attractive to potential investors.
Looking Ahead
As the transaction progresses towards its expected closure in 2026, both Lone Star and BPCE are preparing for a seamless transition. The sale represents a strategic opportunity for BPCE to expand its footprint in Portugal and enhance its offerings in the European banking market.
For Novo Banco, this acquisition signifies a commitment to growth and profitability, ensuring that it remains a key player in the financial sector. The integration into BPCE is expected to bring about innovative banking solutions and a stronger competitive edge in the market.
The sale of Novo Banco to BPCE is not just a financial transaction; it is a strategic move that promises to reshape the banking landscape in Portugal and strengthen the ties between Portuguese and French financial institutions. As the banking sector continues to evolve, this acquisition could set the stage for further developments in the European banking arena.
Stay tuned for more updates as this story unfolds, and watch how Novo Banco navigates its new chapter under BPCE’s leadership.
