Compass Bancshares Inc. is being purchased by Spain-based Banco Bilbao Vizcaya Argentaria S.A. in a cash and stock deal valued at about $9.6 billion.

Compass, with 32 Colorado offices and $736 million in deposits, is among Colorado's 20 biggest banks. It has about 1 percent of the deposit market, according to data from the Federal Deposit Insurance Corp.

The transaction consists of roughly $4.6 billion in cash and about 196 million shares of Banco Bilbao common stock.

Compass, which operates banks from Arizona to Florida, will become a subsidiary of Banco Bilbao, with Banco merging its U.S.-based banking affiliates with Compass.

The boards of both companies have already approved the deal, which is expected to close in the fourth quarter of 2007.

The deal is a 16.3 percent premium over Compass' closing stock price of $61.78 Wednesday on the Nasdaq Stock Market.

Compass shareholders can choose to receive either 2.8 Banco Bilbao American depository shares or $71.82 in cash per Compass share.

After the acquisition is complete, Compass will rank among the top 25 banks in the United States with about $47 billion in total assets, $32 billion in total loans and $33 billion in total deposits.

"BBVA is seeking to become a global and diversified bank, with a focus on high-growth markets," BBVA Chief Executive Jose Ignacio Goirigolzarri said.

Compass shares rose $4, or more than 6 percent, to $70.37 in morning trading on the Nasdaq. BBVA shares fell as the bank said it would sell more shares to help pay for the deal. The stock opened Friday with steep losses, but rebounded slightly by midmorning, down 2.2 percent at 19.54 euros ($25.67).

BBVA plans to issue 196 million new shares, worth around $5 billion. It will also sell stakes in several companies, including a stake of more than 5 percent in Spanish utility Iberdrola SA, which will result in capital gains of about 844 million euros ($1109 million), according to Goirigolzarri.

The boards of both companies have already approved the deal, which is expected to close in the fourth quarter of 2007.

Banco Bilbao is Spain's second largest bank by market value after Banco Santander. Its Mexico-U.S. division includes Bancomer, Mexico's largest bank, as well smaller operations in Puerto Rico, California, Texas and Banco's U.S.-Mexico money transfer business. In June Banco Bilbao announced its acquisition of two Texas banks, to become the fourth-largest bank in the state.

The transaction has been approved by Compass' board and the relevant bodies of Banco Bilbao.

The deal is expected to close in the second half of the year, subject to customary closing conditions including necessary bank regulatory approvals in the U.S. and Spain and the approval of the stockholders of both Compass and Banco Bilbao.