Regulatory approval clears path for shareholder offer
BBVA has received final regulatory clearance for its €17.4 billion bid to acquire Banco de Sabadell, marking the last major step before opening the offer to shareholders. Spain’s National Securities Market Commission confirmed the transaction’s compliance with legal requirements on Friday, paving the way for BBVA to formally launch its tender offer from Monday through October 7.
The deal, which began as a hostile bid over a year ago, has evolved through multiple regulatory reviews and valuation adjustments. Initially valued at €12.2 billion, the offer now stands at €14.9 billion, reflecting dividend payouts and changing stock prices during the extended takeover battle. If successful, the acquisition would create one of the largest banking groups in the eurozone.
Sabadell board under pressure to respond
Sabadell’s board, which has consistently rejected BBVA’s approach, will issue its formal recommendation within 10 working days. Although no position has yet been taken, CEO César González-Bueno questioned the offer’s assumptions, calling it “inadequate” and suggesting it rests on “unrealistic expectations.” The final decision will likely hinge on the bank’s significant base of retail investors, many from Catalonia.
A minority shareholder association has already voiced opposition, labeling the proposal “offensive” and undervalued. Still, BBVA is betting that market conditions and projected synergies will sway shareholder opinion. The bank estimates €900 million in synergies, although this is now expected to be realized in 2029 rather than 2028 due to regulatory delays.
Regulatory conditions and strategic hurdles
The deal has passed scrutiny from both Spain’s competition regulator and the European Central Bank. However, Spain’s government added a key restriction: a ban on merging the two banks legally for at least three years. During this period, Sabadell and BBVA would have to operate independently, retaining separate brands and assets. This condition aims to prevent premature consolidation that could affect market dynamics.
Despite this constraint—and Sabadell’s sale of its UK-based TSB unit to Santander—BBVA remains committed. The bank insists that the long-term value remains intact, especially with the added dividend and buyback incentives Sabadell introduced following the TSB divestment. BBVA Chair Carlos Torres Vila described the timing as “undeniable” for joining two “highly complementary” institutions.
Offer flexibility and next steps
In parallel, BBVA disclosed it had secured authorization from the U.S. Securities and Exchange Commission to lower the acceptance threshold from 50% to 30% of voting rights. If it reaches that mark, Spanish law will trigger a second all-cash offer for the remaining shares. This flexibility could improve BBVA’s chances, especially among undecided investors.
The market response was muted following the announcement. BBVA’s stock fell 1.3% in Madrid trading, while Sabadell’s declined by 0.9%. Still, both banks remain under close investor watch as the shareholder window opens, setting the stage for a defining moment in Spain’s banking sector.
