Banco Sabadell Shareholders Reject BBVA’s Takeover Bid, Ending 18-Month Effort

BBVA’s hostile bid to take over fellow Spanish bank Banco Sabadell has ended after 18 months.

Banco Sabadell shareholders representing 25.47% of the voting rights of the company accepted the takeover bid, a figure that fell short of the 30% that was required, Spain’s National Securities Market Commission (CNMV) said in a Thursday (Oct. 16) press release.

BBVA is Spain’s second-largest bank, while Banco Sabadell is the country’s fourth-largest bank, The Wall Street Journal reported Friday (Oct. 17). A combination of the two would have created Europe’s third-largest bank, the report said.

BBVA’s bid valued Banco Sabadell at $19 billion, per the report.

Banco Sabadell CEO César González-Bueno said in a Friday press release that the bank is stronger after a “major transformation” it carried out over the past five years and now plans to increase its profitability to 16% by 2027 and return 6.45 billion euros to shareholders by that same year.

“We will do all this by providing the best possible service to our customers and supporting the Spanish economy with more financing,” González-Bueno said. “Our customers want Banco Sabadell to remain independent, and we are determined to prove that it is worth keeping Banco Sabadell as a standalone institution.”

BBVA said in a Thursday press release that it plans to resume shareholder remuneration by launching a share buyback program and paying “the highest dividend ever.”

“Looking ahead, our strategic plan and financial targets for the [2025-2028] period consolidate BBVA at the forefront of European banking in terms of both growth and profitability,” BBVA Chair Carlos Torres Vila said in a statement released Thursday.

“We expect to generate approximately 48 billion euro in cumulative attributable profit over these four years and to make available 36 billion euro for shareholder distributions.”

According to the WSJ report, the attempted takeover was seen by analysts as a test case for consolidation among European banks.

The bid was cleared by the CNMV and the European Central Bank but was opposed by politicians, business groups and unions, the report said.

BBVA formally put its offer to Banco Sabadell shareholders in September and later increased its bid by about 10%, per the report.

An earlier attempt to merge the two banks failed in 2020 when they could not agree on a price.