BBVA gets green light to acquire Sabadell

Portugal’s competition authority (AdC) has given the green light for Spanish bank Banco Bilbao Vizcaya Argentaria (BBVA) to acquire an exclusive controlling share in Banco de Sabadell following BBVA’s Public Exchange Offer announced on 9 May.

On 10 July 2024, the AdC’s administrative board decided not to oppose the operation for the purchase of the bank which operates in Portugal, since it was not likely to create significant blocks to effective competition in the national market or in a substantial part of it”.

BBVA launched the hostile €12.23Bn all-share takeover bid in a surprise move that triggered immediate opposition from the government.

BBVA took the offer directly to Sabadell shareholders after Sabadell’s board had rejected the bid. Hostile takeovers are rare in European banking and can end up in months of negotiations as politicians weigh in and regulators worry about potential market instability.

A hostile takeover bid involving a bank had not happened for 40 years. To offset, BBVA has offered one share for 4.83 Sabadell shares, valuing the bank it will now purchase at almost €12Bn.

If the Public Exchange Offer is successful, the merger of the two banks will create a bank with €1Bn of assets, 135,462 staff all over the world (of which Sabadell has 19,213) and a chain of around 7,000 branches.

It will become one of the main European banks and will overtake CaixaBank (which owns Portugal’s BPI) in assets, becoming Spain’s second largest bank in assets.

Banco Sabadell sells products such as investment funds, pension funds, and insurance alongside its banking activity. It also operates in the real estate sector. It has a branch in Portugal.