Bankia S A : convenes 1 December shareholders’ meeting to approve merger with CaixaBank

Bankia's board of directors approved the notice of a general meeting of shareholders to be held on 1 December in Valencia, in order to put the proposed merger with CaixaBank to the vote.

The extraordinary general meeting of shareholders of the company will take place at the Palacio de Congresos in Valencia, once BDO, the independent expert chosen by the Valencia Companies Register to analyse the merger, gives the go-ahead.

The agenda includes a resolution to approve the merger by absorption of Bankia by CaixaBank 'with the absorbed company being wound up and all its assets being transferred en bloc to the absorbing company, in accordance with the common draft terms of merger'.

The shareholders will also be asked to approve the Board of Directors' performance and delegate authority to the Board to register, interpret, amend and execute the resolutions adopted by the meeting.

The meeting marks a further step towards the proposed merger by absorption of Bankia by CaixaBank, which is expected to be completed in the first quarter of 2021, once all the necessary regulatory authorisations have been received.

The exchange ratio for the merger has been set at 0.6845 new ordinary shares of CaixaBank for each Bankia share, with a premium of 20%. Thus, 74.2% of the new bank's shares will be held by CaixaBank shareholders and 25.8% by Bankia shareholders.

CriteriaCaixa, an entity 100% controlled by Fundación Bancaria 'la Caixa', will continue to be CaixaBank's reference shareholder, with around 30% of the share capital, while the Frob will hold 16.1%.

The new entity, which will have total assets of more than 664,000 million euros, will be the benchmark bank in Spain, with more than 20 million customers and market shares of 25% in loans and 24% in deposits.

CaixaBank and Bankia estimate that gradually over a five-year horizon the new entity will harvest revenue synergies totalling 290 million euros per year. They also expect to achieve recurring cost savings of 770 million euros per year (in full from 2023).

Both banks have indicated that their strong capital position will enable them to absorb restructuring costs and valuation adjustments, so as to result in a CET1 ratio for the merged entity of 11.6%, maintaining a comfortable margin above the regulatory minimum.