Banking’s Mediterranean Deal Flurry Widens With Novo Banco Sale

The wave of bank acquisitions washing over Southern Europe has reached Portugal.

On Friday, Lone Star agreed to sell its 75% stake in the country’s fourth-largest lender, Novo Banco SA, to the French banking group BPCE SA in what would be the biggest euro area cross-border takeover in the sector in a decade.

Dealmaking in the region kicked off a little over a year ago in Spain when BBVA SA made an unsolicited offer for domestic rival Banco Sabadell SA. It subsequently spread to Italy as one local bank after the next joined in. Even Greece— once ...