Spain’s Caixabank and Bankia have set out the terms for their planned merger.
The deal will create the country’s largest lender, with assets totalling over 664 billion euros - or about 787 billion dollars.
In a statement Friday (September 18) the two banks said they expect the plan to deliver cost savings and a boost to revenues.
Though the deal is described as a merger, analysts say it looks more like a takeover by Caixabank.
It’s almost three times as big as Bankia by market value, and almost double the size by assets.
The agreement values the smaller lender at about 4.3 billion euros, or about 5.1 billion dollars.
Now the combined entity will be valued at about four times that amount.
Since news of the plan first emerged, shares in Bankia have gained about 39%, while Caixabank is up 14%.
The deal comes as banks across Europe struggle to cope with record low interest rates, and the economic downturn.
Analysts predict those forces will drive further tie-ups in the sector.