Item 1.01 Entry into a Material Definitive Agreement. Stock Purchase Agreement OnNovember 15, 2020 ,The PNC Financial Services Group, Inc. ("PNC") entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Banco Bilbao Vizcaya Argentaria, S.A. ("BBVA"). Upon the terms and subject to the conditions set forth in the Stock Purchase Agreement, PNC will purchase from BBVA 100% of the issued and outstanding shares ofBBVA USA Bancshares, Inc. (the "Stock Purchase"), a financial holding company ("BBVA USA Holdco") conducting its business operations primarily through itsU.S. banking subsidiary,BBVA USA , anAlabama -chartered bank ("BBVA USA Bank "), for$11.6 billion in cash on hand in a fixed price structure, subject to certain adjustments related to transaction expenses and tax matters. PNC is not acquiringBBVA Securities, Inc. ,Propel Venture Partners Fund I, L.P. andBBVA Processing Services, Inc. (the "Carve-Out Transactions"). Immediately following the closing of the Stock Purchase, PNC intends to mergeBBVA USA Holdco with and into PNC, with PNC continuing as the surviving entity. Post-closing, PNC intends to mergeBBVA USA Bank with and intoPNC Bank, National Association , an indirect wholly owned subsidiary of PNC ("PNC Bank "), withPNC Bank continuing as the surviving entity. The completion of the Stock Purchase is subject to certain conditions, including, among others, the absence of any injunction or other legal prohibition on the completion of the Stock Purchase, the receipt of required governmental approvals and/or the expiration of certain waiting periods, the accuracy of the representations and warranties of the other party (generally subject to a material adverse effect standard), material compliance by the other party with its obligations under the Stock Purchase Agreement, and the completion of the Carve-Out Transactions prior to closing. Under the Stock Purchase Agreement, BBVA has agreed to take or refrain from taking certain actions, including, among others, (i) to causeBBVA USA Holdco and its subsidiaries, includingBBVA USA Bank , to operate in the ordinary course of business consistent with past practice and not to enter into certain types of transactions between the execution of the Stock Purchase Agreement and the closing of the Stock Purchase and (ii) subject to certain exceptions, not to (a) engage in a retail banking business in theU.S. for two years following the closing of the Stock Purchase, or (b) solicit or hire any employees ofBBVA USA Holdco or its subsidiaries, includingBBVA USA Bank , for one year following the closing of the Stock Purchase. Under the Stock Purchase Agreement, PNC has agreed to take or refrain from taking certain actions, including, among others, (i) to use reasonable best efforts to obtain any necessary regulatory consents and (ii) subject to certain exceptions contained in the Stock Purchase Agreement, not to solicit or hire any BBVA employees retained by BBVA for one year following the closing of the Stock Purchase. The Stock Purchase Agreement contains customary representations and warranties of BBVA and PNC. The Stock Purchase Agreement also contains certain indemnification obligations of each party with respect to breaches of representations, warranties and covenants and certain other specified matters. The Stock Purchase Agreement contains certain termination rights for PNC and BBVA, as the case may be, applicable upon, among other events, (i) the Stock Purchase having not been completed on or prior toNovember 15, 2021 (subject to extension in certain circumstance), or (ii) a breach by the other party that is not or cannot be cured within 45 days' notice of such breach or is not capable of being cured byNovember 15, 2021 , which breach would result in the failure of the conditions to the terminating party's obligations to complete the transactions contemplated by the Stock Purchase Agreement. The foregoing description of the Stock Purchase and the Stock Purchase Agreement does not purport to be complete and is qualified in its entirety by reference to the Stock Purchase Agreement, which is filed as Exhibit 2.1 hereto, and is incorporated into this report by reference. The Stock Purchase Agreement and the above description of the Stock Purchase Agreement have been included to provide investors and security holders with information regarding the terms of the Stock Purchase Agreement. It is not intended to provide any other factual information about PNC, BBVA or their respective subsidiaries and affiliates. The Stock Purchase Agreement contains representations and warranties of each of PNC, on the one hand, and BBVA, on the other hand, made solely for the benefit of the other. The assertions embodied in those representations and warranties are qualified by information in confidential disclosure schedules that the parties have exchanged in connection with signing the Stock Purchase Agreement. The disclosure schedules contain information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Stock Purchase Agreement. In addition, such representations and warranties may apply standards of materiality in a way that is different from what may be viewed as material by security holders of, or other investors in, PNC or BBVA. Moreover, the representations and warranties in the Stock Purchase Agreement were used for the purpose of allocating risk between PNC, on the one hand, and BBVA, on the other hand, and not necessarily for establishing matters as fact, and information concerning the subject matter of the representations, warranties and covenants may change after the date of the Stock Purchase Agreement, which subsequent information may or may not be fully reflected in the parties' public disclosures. Security holders and investors are not third-party beneficiaries under the Stock Purchase Agreement. Accordingly, you should read the representations and warranties in the Stock Purchase Agreement not in isolation but only in conjunction with the other information about PNC and BBVA, or any of their respective subsidiaries or affiliates
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that the respective companies include in reports, statements and other filings
they make with the
BBVA USA Bank , may not perform as we currently project or in a manner consistent with historical performance. As a result, the anticipated benefits, including estimated cost savings, of the transaction may be significantly harder or take longer to achieve than expected or may not be achieved in their entirety as a result of unexpected factors or events, including those that are outside of our control. • The combination ofBBVA USA Holdco, including itsU.S. banking subsidiary,BBVA USA Bank , with that ofPNC andPNC Bank may be more difficult to achieve than anticipated or have unanticipated adverse results relating toBBVA USA Holdco, including itsU.S. banking subsidiary,BBVA USA Bank , or our existing businesses. • Completion of the transaction is dependent on the satisfaction of customary closing conditions, which cannot be assured. The timing of completion of the transaction is dependent on various factors that cannot be predicted with precision at this point.
These forward-looking statements are also subject to the principal risks and
uncertainties applicable to our businesses generally that are disclosed in PNC's
2019 Form 10-K and 2020 Form 10-Qs and in PNC's subsequent
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Number Description Method of Filing Stock Purchase Agreement dated as Filed herewith 2.1 of November 15, 2020* The cover page of this Current Report on Form 8-K, formatted in 104 Inline XBRL
*The schedules and similar attachments to this exhibit have been omitted
pursuant to Item 601(a)(5) of Regulation S-K.
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