BBVA Bank remains committed to completing the takeover of Sabadell despite ongoing opposition and a mixed market reaction. BBVA management does not intend to abandon the deal, even after recent Sabadell shareholder meetings where significant dividends and the sale of the British subsidiary TSB were approved.
In early September, approval of the updated deal prospectus is expected from the National Securities Market Commission (CNMV). After this, Sabadell shareholders will have the opportunity to vote for or against BBVA’s offer. The decision period may last from 30 to 70 days, and BBVA reserves the right to improve its offer up to five days before the deadline.
The deal between the two major Spanish banks has been under discussion for over a year. BBVA is offering to exchange Sabadell shares for its own stock and pay additional dividends. According to BBVA’s calculations, the offer exceeds Sabadell’s market value by 30% as of late April 2024, and by 50% compared to the average price in the six months prior to the announcement.
However, Sabadell’s board of directors rejected BBVA’s initiative from the outset, believing that independent development of the bank would bring greater benefit to shareholders. Sabadell’s management emphasizes that the sale of TSB and the dividend payout are not related to the takeover attempt but are part of the bank’s own domestic growth strategy.
In recent months, Sabadell shares have traded above BBVA’s offer price, strengthening the Catalan bank’s position. However, after the announcement of the TSB sale and dividend payments, the gap narrowed, though Sabadell is still valued by the market above BBVA’s proposal.
The deal has also attracted the attention of regulators. The National Commission on Markets and Competition (CNMC) conducted an extensive review, after which the Spanish government introduced additional conditions: in the event of a merger, the banks must operate independently for at least three years, without layoffs or branch closures. This restricts BBVA’s ability to quickly integrate and achieve the expected synergies.
Despite these restrictions, BBVA is not abandoning its plans. The bank expects that following regulatory approval and a shareholders’ vote, it will be able to finalize the deal and create Spain’s second-largest banking group.
For its part, Sabadell continues to pursue its independent strategy and does not comment on BBVA’s new statements. At the last shareholders’ meeting, more than 99% supported the sale of TSB and the payment of dividends, further strengthening the bank’s management.
In the coming months, the fate of the deal will depend on the regulator’s decision and the outcome of Sabadell shareholders’ vote. If BBVA fails to convince the majority, this will mark a second unsuccessful takeover attempt in the past five years. If successful, a new major player will emerge on Spain’s banking market, capable of competing with industry leaders.
