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Unicaja and Liberbank announce creation of Spain's fifth-biggest bank

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FILE PHOTO: The logo of Unicaja bank is seen on the facade of a Unicaja bank branch in downtown Ronda

MADRID (Reuters) - The boards of Spanish lenders Unicaja and Liberbank on Tuesday approved the terms of an all-in share deal that will create Spain's fifth-biggest bank with around 110 billion euros in assets.

Under the terms of the deal, in which Unicaja will fully absorb Liberbank by mid- to late 2021, the exchange ratio is set at 2.7705 Liberbank shares for each Unicaja share, the lenders said.

The deal follows the approval of a merger earlier this month between state-owned Bankia and Caixabank to create the largest domestic lender and marks an acceleration of the sector's consolidation after BBVA and Sabadell called off merger talks last month.

Current Unicaja board chairman Manuel Azuaga will be the future chairman of the combined entity, the bank said, while Liberbank CEO Manuel Menendez will serve as the new company's CEO.

The deal still has to be approved by shareholders in votes to be held in the first quarter of 2021.

Workforce overlaps will be analysed after the merger, Unicaja said, adding that no decisions about staff numbers had been taken yet.

European banks are under growing pressure to join forces to face rising bad debt and record-low interest rates.

The Unicaja-Liberbank deal will reduce the number of Spanish lenders to 10, already accounting for the Bankia-Caixabank deal - down from 55 before the 2008 financial crisis.

(Reporting by Jesús Aguado, Clara-Laeila Laudette and Nathan Allen, editing by Andrei Khalip and Nick Zieminski)