Analyst Note| Eric Compton, CFA |
PNC has announced that it will acquire BBVA USA Bancshares, the U.S.-based operations of BBVA. When PNC sold its stake in BlackRock, there was heavy speculation that the bank would pursue a sizable acquisition. PNC telegraphed this intention, signaling it wanted to pursue an acquisition that would help it realize its national banking franchise goals. BlackRock after-tax proceeds were roughly $11 billion, and the acquisition is set to be an all cash deal worth $11.6 billion. The estimated price to tangible book multiple is 1.34 and PNC estimates that they will achieve an internal rate of return of greater than 19% on the transaction. The deal is expected to close in mid-2021.