Spanish banks Caja Espana Duero and Unicaja reached an agreement to fuse into one financial entity late on Friday night.
The agreement comes after nine months of negotiations which have ended with an accord for Unicaja to absorb Caja Espana Duero in an operation that includes 850 million euros (1,112 million U.S. dollars) of state funding on top of the 525 million euros Caja Espana Duero had previously received from Spain's Ordinary Bank Restructuring Fund (FROB).
The operation leads to the creation of the seventh largest bank in Spain with 79,000 million euros in which Caja Duero will transfer all of its business and its clients' deposits with Unicaja. This operation includes all of the bank's offices and staff.
It is the first such operation to take place with the help of state funding since the arrival of the Popular Party to power in Spain following the November 20th General elections last year. (1 euro=1.31 U.S. dollars)