Two weeks after announcing that it intended to launch a hostile takeover bid for its rival, BBVA has confirmed its purchase offer for Banco Sabadell.

The entity chaired by Carlos Torres has communicated this Friday to the National Securities Market Commission (CNMV), at the close of the market, its voluntary offer for all of Sabadell’s securities. The supervisor now has to admit the operation for processing and may request more information from the entity about the details of the proposal.

BBVA points out that “the decision to formulate the offer has been adopted by agreement approved by the board of directors” at its meeting on May 8, 2024. That is, in the terms that it communicated to the market two weeks ago. Specifically, it proposes the exchange of one BBVA share for 4.83 Sabadell shares, which means valuing this bank at nearly 12,000 million euros. At the close of the stock market this Friday, Sabadell is worth 10,388 million euros.

It must be remembered that, at the end of April, BBVA proposed a merger to Sabadell, on paper friendly, which its rival rejected on the grounds that it undervalued the entity and that it has a better future alone. Both already negotiated four years ago without an agreement coming to fruition.

After the rejection, BBVA announced a hostile takeover bid on May 9, without the support of the takeover entity. He did it on the eve of the Catalan elections and with the opposition of the Government, the majority of political parties and the Catalan employers’ association.

Changes to the permissions you need to request

There are no changes in the main conditions, but there are some details. “By virtue of this request for authorization, the information and characteristics of the offer provided for in the previous announcement are confirmed, stating that no variation has occurred with respect to said information, except for the following.”

It refers to the authorizations that the Competition authorities must give you. You no longer only have to receive them from Spain, the United Kingdom or Portugal, but also from France and Morocco, according to the CNMV.

It points out that it also requires the approval of the European Central Bank, the CNMV – not only for the terms of the takeover bid, but also for the purchase of a ‘broker dealer’ – and the Central Bank of Morocco in relation to the change of indirect control in the branch of the affected company in Casablanca, he points out. However, he assures that it does not require the approval of various US organizations, such as the Federal Reserve.

On the other hand, it will notify Brussels. “The Offeror will submit the notification to the European Commission provided for in Regulation (EU) 2022/2560 of the European Parliament and of the Council of December 14, 2022 on foreign subsidies that distort the internal market,” he clarifies.

All of these processes can take months. In fact, BBVA already said that, at least half a year. Furthermore, the takeover bid is conditional on at least 50% of Banco Sabadell shareholders accepting it. Only later would the merger process be launched, which the Executive has already expressed its rejection of, due to the impact it may have on reducing competition.

Specifically, the merger would leave two-thirds of Spanish deposits in the hands of three entities (the future merged BBVA, Santander and Caixabank). In addition, it would impact employment and the closure of offices. In this topic we tell which towns would be most affected if the two entities end up uniting.


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