BBVA has announced a €14.8bn hostile takeover bid for Banco Sabadell, aiming to significantly alter the landscape of Spain’s banking sector.
If the merger proceeds, the combined entity would rank as the second-largest bank in Spain by domestic assets, with holdings nearing €1tn, following Caixabank.
The Spanish National Securities Market Commission has given its approval for the transaction, setting the stage for Sabadell shareholders to evaluate the offer until the deadline of 7 October, with results anticipated by 14 October.
BBVA proposes to exchange one newly issued ordinary share and €0.7 in cash for every 5.5483 Banco Sabadell shares. This arrangement values Sabadell at approximately €14.76bn, reported Reuters, based on recent market prices.
BBVA chair Carlos Torres Vila said: “The union of two highly complementary banks at their best moment has an undeniable logic, and is beneficial for shareholders, customers and employees of both entities, and society as a whole.
“We invite Banco Sabadell shareholders to join this integration project with BBVA, the best possible partner, and a European leader in growth and profitability. Now is the time.”
Despite BBVA’s assertion that it will not enhance its offer, market trends since the bid was announced in April 2024 suggest that investors expect a possible increase, the publication wrote. BBVA retains the legal option to adjust its proposal up to five days before the acceptance period concludes.
Under the current terms, Banco Sabadell shareholders would acquire a 13.6% stake in BBVA. This would enable them to participate in anticipated synergies designed to generate annual savings of €900m after full integration by 2029.
According to BBVA, the proposed premium on Sabadell shares is notable compared to their value prior to merger discussions going public on 29 April 2024.
However, Sabadell’s chairman, Josep Oliu, expressed concerns that BBVA’s offer undervalues Sabadell’s future potential and is less favourable than a previously rejected bid.
Oliu said that he has confidence in Sabadell’s independent strategy outlined in the bank’s 2025–2027 plan, which aims at exceeding €1.6bn in profits by 2027 and achieving a return on tangible equity (ROTE) of 16%. This plan includes expanding commercial activity in Spain and improving risk management.
Sabadell said that its board will conduct a detailed analysis before advising shareholders on whether to accept BBVA’s offer.
Sabadell CEO César González-Bueno said: “In our our preliminary review we found even more shortcomings and omissions in the modelling and assumptions than in the previous version.
“Notably, the option for BBVA to acquire less than 50% of Sabadell’s shares reflects a clear lack of conviction in their own proposal, and doubts over the attractiveness of their offer.
“It seems like an inadequate offer based on unrealistic assumptions, but we will need to analyse it in detail before giving a full assessment.”
