(June 13 – 10:40 ET) – Bank of Montreal says it is exploring a possible strategic alliance with the combined Grupo Financiero Bancomer and Spain’s Grupo Banco Bilbao Vizcaya Argentaria, after it was announced that Bancomer’s board has recommended the deal.

BMO says it, “intends to conclude discussions over the next several weeks with BBVA with a view to crystallizing the value of its investment and exploring the feasibility of a strategic alliance with BBVA and GFB”.

“Because of competing strategic priorities, Bank of Montreal has chosen not to increase its investment to offset the dilution and negative accounting impacts. Our desire to pursue business initiatives with BBVA and GFB reflects our strong confidence in both Mexico and the prospective new bank,” added Jeff Chisholm, vice-chairman at BMO and a director of GFB.

Discussions with BBVA will focus on cashing out of GFB assuming the deal goes ahead as contemplated. BMO says it “will seek to redirect its investment out of Bancomer into other opportunities which it will do within the context of the contractual arrangements governing its current investment in GFB.” It will also contemplate future alliances, focusing on the Hispanic market in the U.S. which has become a big strategy at BMO’s Chicago-based Harris Bank subsidiary.