Lone Star agrees to sell Novo Banco to BPCE for 6.4 billion euros

Lone Star has reached an agreement with French banking group BPCE for the sale of Novo Banco for an amount equivalent to a valuation of 6.4 billion euros for 100% of the share capital, and it announced the agreement on Friday.

“Novo Banco, S.A. (“novobanco” or the “Bank”) hereby announces that its majority shareholder, Nani Holdings S.à r.l. (an entity owned by Lone Star Funds), has signed a Memorandum of Understanding for the sale of its shareholding to BPCE, for an amount equivalent to a valuation of approximately €6.4 billion at the end of 2025, for 100% of the share capital,” reads a statement sent to the Portuguese Securities Market Commission (CMVM).

The parties anticipate completing the transaction in the first half of 2026.

Also in a statement released today, BPCE said it was “in talks with the Portuguese government and the Bank Resolution Fund to acquire their stakes in Novobanco (11.5% and 13.5%, respectively), on identical terms”.

The French group highlights that the purchase of Novo Banco, “representing an amount of approximately €6.4 billion (for 100% of the capital) and a multiple of around 9x annual earnings, is the largest cross-border acquisition in the eurozone in more than 10 years”.

“After the company completes the transaction, Portugal will become the Group’s second largest national retail market,” it emphasises.

Currently employing more than 3,000 people in Portugal, BPCE notes that the opening in 2017 of a multi-company competence centre in Porto “has deepened local ties”.

For Novo Banco, the decision by the majority shareholder to proceed with a direct sale to BPCE “represents a strategic opportunity, positioning Novo Banco to join one of the largest and most solid European financial groups”.

“By integrating Novo Banco into the Group, alongside the Banque Populaire and Caisse d’Epargne banking networks, BPCE will strengthen its role as an important partner in the development of the Portuguese economy”.

Novo Banco said that the transaction now announced “concludes the transformation process” of the banking institution, “making it one of the most profitable banks in Europe, with a medium-term return on tangible equity (RoTE) target of over 20%.”

The statement quotes the CEO of Novo Banco, who said that with its integration into BPCE, the bank “gains the strength and size of one of Europe’s most solid financial groups, while continuing to develop its own successful path”.

“This transaction reinforces our mission to support Portuguese families and businesses, deepens our commitment to the national economy and ensures a long-term future based on solidity, trust and a shared ambition. This is a great moment for Novo Banco, and we move forward with renewed confidence and a clear purpose,” said Mark Bourke.

The CEO of Groupe BPCE, Nicolas Namias, said that Novo Banco, “with market shares of 9% in the personal customer segment and 14% in the corporate segment, […] has solid fundamentals, strong growth potential and a high level of profitability”.

“As a leading player in community banking in France through the Banque Populaire and Caisse d’Epargne networks, the Group will also become a major commercial banking player in Europe with the acquisition of Novobanco, actively participating in the financing of the Portuguese economy,” he said.

It added that “BPCE’s management and employees are particularly enthusiastic about the prospect of welcoming Novobanco, its management team and its 4,200 employees into the Group”.

Groupe BPCE is the second-largest banking group in France and the fourth-largest in the eurozone, in terms of capital, with 100,000 employees and 35 million customers worldwide.

Authorities created Novo Banco on 1 January 2014 to take over part of the banking activity of Banco Espírito Santo (BES) following its resolution.

Since 2017, when Lone Star bought Novo Banco, the Bank Resolution Fund has injected €3.405 billion into the bank, generating several political and media controversies. With the early end of this mechanism at the end of 2024, Novo Banco can now be sold and can pay dividends immediately.

Lone Star has announced the sale of part of the bank on the stock exchange this year and a dividend distribution plan to make the institution attractive to investors.