A major acquisition agreement has been reached by France’s BPCE to purchase Portugal’s Novo Banco in a transaction valued at €6.4 billion ($7.39 billion). The deal includes a 75% stake that had been held by the U.S.-based private equity firm Lone Star. Confirmation of the agreement was jointly announced on Friday by both BPCE and Lone Star. Additionally, the Portuguese government and the country’s banking resolution fund—who together own the remaining 25% of Novo Banco, with stakes of 11.5% and 13.5% respectively—have also agreed to divest their shares to BPCE under the terms of the same transaction.
The development has been viewed as part of a broader trend of increased merger activity within the European banking sector, both at a domestic and cross-border level. Regulatory bodies across the continent, including the European Central Bank (ECB), have long advocated for greater integration within the European financial system. It has been suggested by many within the industry that such moves are necessary to bolster competitiveness, streamline operations, and improve resilience in the face of increasing competition from American banking giants.
The chief executive of BPCE, Nicolas Namias, noted during a press call that the acquisition aligned closely with the objectives laid out by the ECB, particularly its support for pan-European banking consolidation. It was emphasized that BPCE’s acquisition of Novo Banco, a full cash transaction, would mark a significant milestone in that direction.
According to Namias, the acquisition would provide BPCE with a second substantial retail banking market outside of France. Currently, the French bank operates two major domestic banking networks. The purchase of Novo Banco is expected to not only expand its geographic footprint but also enhance its influence within the European financial landscape. The scale of the deal has been described as one of the most significant cross-border banking transactions in Europe in recent years. This sentiment was echoed by François Villeroy de Galhau, the Governor of the Bank of France, who described the acquisition as encouraging for both the French banking system and the European Banking Union as a whole.
Novo Banco’s formation in 2014 had come in the aftermath of the collapse of Banco Espírito Santo (BES), one of Portugal’s largest financial institutions at the time. Following a state-led bailout, the bank had been restructured and eventually privatized. In 2017, Lone Star acquired a 75% stake by investing €1 billion, while the remainder of the shares had remained in public hands.
The current deal reflects BPCE’s strategy to strengthen its operational base in southern Europe. Although the French bank already maintains a small consumer credit business in Portugal, along with a Natixis-run technology centre handling IT and back-office functions, the acquisition of Novo Banco is expected to significantly elevate its presence in the country. As of March, Novo Banco was reported to have held €30 billion in customer deposits and €28.5 billion in net loans, figures that represent roughly a 9% share of the Portuguese banking market. The institution also operates nearly 300 branches and employs over 4,200 people.
Analysts have interpreted the acquisition as a response to evolving economic and regulatory conditions. In particular, consolidation has been increasingly viewed as a solution to challenges posed by low interest rates, higher compliance costs, and the need for digital transformation. As a result, cross-border acquisitions have gained momentum in Europe. In neighboring Spain, for instance, BBVA has launched a €14 billion hostile bid to acquire Sabadell, while Italy’s UniCredit has explored mergers with Commerzbank in Germany and Banco BPM in Italy. These moves have triggered political backlash in several countries, further highlighting the delicate balance between market expansion and national banking autonomy.
The transaction involving Novo Banco is expected to be finalized during the first half of 2026, pending regulatory approval and fulfillment of other standard conditions. Observers believe that the successful completion of the deal will reinforce the European financial sector’s shift toward consolidation and could prompt additional cross-border transactions.
While the full strategic and operational implications of the acquisition remain to be seen, the move has already been hailed as a significant vote of confidence in Portugal’s banking market. It has also reaffirmed BPCE’s long-term commitment to expanding its footprint beyond its home country, especially in a region where it already holds a foundational presence.
Once concluded, the acquisition is expected to reshape Portugal’s financial landscape and position BPCE as a key player in southern European retail banking, reinforcing its role in the evolving dynamics of the European banking ecosystem.
