Lone Star Funds has reached an agreement to sell Novo Banco, Portugal's fourth-largest bank, to BPCE for an estimated value of €6.4 billion, marking the conclusion of a successful transformation process for the bank.

Target Information

Lone Star Funds has announced the signing of a Memorandum of Understanding for the sale of Novo Banco, S.A., which stands as Portugal's fourth-largest banking institution, to BPCE, a prominent European banking entity. The transaction involves a cash consideration at closing, valuing 100% of Novo Banco's share capital at an estimated €6.4 billion, projected at the end of 2025.

This transaction signifies the conclusion of a multi-year transformation of Novo Banco, which Lone Star acquired 75% of in 2017. Under Lone Star's management, alongside other stakeholders, Novo Banco has undergone a significant turnaround, establishing itself as one of the most profitable banks in Europe, with a target return on tangible equity (RoTE) exceeding 20%.

Industry Overview

The banking industry in Portugal has seen substantial evolution over the past decade, particularly following the financial crisis that necessitated restructuring and recovery efforts across