BBVA Initiates Aggressive Takeover Bid for Sabadell

In a dramatic turn of events within Spain’s financial sector, BBVA, the country’s second-largest bank, has launched a hostile takeover bid for its smaller rival Sabadell. This aggressive move comes merely days after Sabadell’s rejection of an earlier merger proposal, setting the stage for a potential upheaval in the Spanish banking landscape.

BBVA’s latest bid mirrors the terms of the previously rejected merger proposal, offering an exchange rate of one new BBVA share for every 4.83 Sabadell shares. This valuation pegs Sabadell, the nation’s fourth-largest banking group by capitalization, at nearly 11.5 billion euros ($12.3 billion).

Sabadell’s board of directors, having meticulously deliberated over the proposal, concluded that it did not align with the best interests of the bank and its shareholders. Despite BBVA’s assertion of the offer’s generosity and its refusal to consider further enhancements, Sabadell remains resolute in its stance.

Related: Banco Sabadell Rejects Rival BBVA Merger Proposal

The roots of this corporate saga trace back to November 2020 when both banks initially unveiled plans for a merger, citing the need to fortify themselves amidst the economic uncertainties stemming from the Covid-19 pandemic. However, this alliance swiftly unraveled, with Sabadell citing BBVA’s failure to accurately assess its business’s true worth.

Had the merger materialized, it would have birthed a formidable banking entity capable of challenging Spain’s banking leader, Santander, along with European titans such as HSBC and BNP Paribas. BBVA, with an extensive footprint across Mexico, Argentina, Turkey, and a customer base of 74.1 million, ranks as Spain’s second-largest banking group by capitalization.

Source: URDU Point