Banco Bilbao Vizcaya Argentaria (BBVA) said today it had agreed to buy US bank Compass Bancshares for $9.6 billion.
Spain's number two bank billed the cash-or-shares buy as its biggest ever acquisition and said it would issue shares worth €3.9 billion to help fund it.
Banco Bilbao Vizcaya Argentaria moved into the United States last year, buying banks in Texas to benefit from cross-border money flows with Mexico, where it owns the leading lender.
BBVA said it would issue 196 million new shares to fund the new acquisition and sell its entire 5 per cent stake in Spanish utility Iberdrola, netting capital gains of €844 million.
Last year, BBVA carried out a surprise €3 billion capital increase to rebuild its balance sheet after another glut of acquisitions in the United States and China.
At yesterday's closing price, 196 million BBVA shares were worth €3.914 billion.