BBVA‘s Opposed Takeover Bid for Sabadell Receives Regulatory Approval
Table of Contents
Spain’s BBVA is set to launch a tender offer for Sabadell after securing the green light from the CNMV, possibly creating a major European banking force. The deal, however, faces ongoing scrutiny from the Spanish government regarding competition.
What Happened?
Spanish banking giant BBVA announced on Friday, September 6, 2024, that it’s tender offer for Sabadell will begin on Monday, September 9, 2024, following approval from the
Comisión Nacional del Mercado de Valores (CNMV), Spain’s stock market regulator.
This follows BBVA’s unsolicited all-share bid announced in May 2024.
The proposed merger aims to establish a banking powerhouse capable of competing with larger European institutions like Santander, BNP paribas, and HSBC. BBVA values Sabadell at approximately €15 billion (roughly $18 billion USD as of May 2024).
Why It Matters: Competition Concerns and Government Intervention
Despite the CNMV’s approval, the deal isn’t guaranteed. The Spanish government, led by a left-wing coalition, has voiced concerns about the potential reduction in competition within the Spanish banking sector.
In June 2024, Madrid imposed strict conditions, including a three-year freeze on any further merger activity between BBVA and Sabadell, to safeguard market competition. This move is widely considered a important obstacle to the deal’s completion.
Financial Performance
BBVA reported a record net profit of €5.45 billion for the first six months of 2024, a 9.1 percent increase from the €4.99 billion reported during the same period in 2023. This strong financial performance positions BBVA favorably for the acquisition.
| Period | Net Profit (€ billions) | Change (%) |
|---|---|---|
| First Six Months 2024 | 5.45 | +9.1 |
| First Six Months 2023 | 4.99 | – |
Background: BBVA and Sabadell
BBVA is Spain’s second-largest bank, with a substantial presence in Latin America and Turkey.