Spanish bank to acquire Compass

Compass Bancshares Inc., which operates banks from Arizona to Florida, said Friday that it was being purchased by Spain-based Banco Bilbao Vizcaya Argentaria in a cash-and-stock deal valued at about $9.6 billion.

The transaction consists of about $4.6 billion in cash and about 196 million shares of Banco Bilbao common stock.

Compass would become a subsidiary of Banco Bilbao, which would merge its U.S.-based banking affiliates with Compass.

The boards of both companies have already approved the deal, which is expected to close in the fourth quarter.

The deal is a 16.3% premium over Compass’ closing stock price of $61.78 on Wednesday.

After the acquisition, Compass would rank among the top 25 banks in the U.S. with about $47 billion in assets, $32 billion in loans and $33 billion in deposits.

“BBVA is seeking to become a global and diversified bank, with a focus on high-growth markets,” Banco Bilbao Chief Executive Jose Ignacio Goirigolzarri said.

U.S.-held Banco Bilbao shares rose 2.9% to $12.40.

Banco Bilbao plans to issue 196 million new shares, worth about $5 billion. It also would sell its holdings in several companies, including a stake in Spanish electric utility Iberdrola.

Banco Bilbao is Spain’s second-largest bank by market value. Its Mexico-U.S. division includes Bancomer, Mexico’s largest bank.