Spanish banking giant BBVA has announced that its tender offer for smaller national rival Sabadell will commence on Monday, following the stock market regulator’s approval of its hostile bid. The proposed deal aims to create a European banking powerhouse capable of competing with industry heavyweights such as Santander, BNP Paribas, and HSBC.
BBVA, Spain’s second-largest bank with a significant presence in Latin America and Turkey, valued Sabadell at around 15 billion euros ($18 billion) in its all-share bid announced in May 2024. The CNMV stock market regulator has ruled that BBVA will have 30 days, beginning on September 8, to secure enough Sabadell shareholders to accept the proposal. The offer is conditional on the acceptance of a minimum number of shares representing more than half of the voting rights of Banco Sabadell, excluding treasury shares.
BBVA chair Carlos Torres Vila described the offer as “very attractive,” reflecting Sabadell’s “best valuation in more than a decade, while incorporating a premium clearly higher than that of recent similar transactions in Europe.” He added that following the merger, Banco Sabadell shareholders are set to obtain earnings per share 25 percent higher than they would with a standalone Banco Sabadell.
However, Sabadell chairman Josep Oliu has expressed skepticism about the bid, stating that his lender has grown more in value and provided more rewards to its shareholders than BBVA since the takeover bid was announced. He described the offer as “weak” and based on “unrealistic assumptions,” adding that it “undervalued our entity’s standalone project.”
Sabadell has taken steps to fend off the bid, including the sale of its UK subsidiary TSB to Santander for 3.1 billion euros. This move is seen as an effort to weaken its appeal as a takeover target and provide more cash for dividends, share buybacks, or acquisitions that could reduce the appeal of BBVA’s offer to shareholders.
The outcome of the takeover bid remains uncertain, given Sabadell’s dispersed ownership structure, with no investor holding more than seven percent of the bank. BBVA has already overcome opposition from the left-wing Spanish government and navigated approvals for its offer from the European Central Bank and Spain’s competition authority. The company reported a record net profit of 5.45 billion euros for the first six months of the year, up 9.1 percent from the same period last year.
The takeover bid will be open from September 8 to October 7, 2025, and its outcome will have significant implications for the European banking sector. The creation of a European banking powerhouse would enable BBVA to compete more effectively with industry heavyweights, potentially leading to increased market share and revenue growth. The next steps will be crucial in determining the fate of the proposed deal and its potential impact on the banking sector.
