BBVA to proceed with Banc Sabadell takeover bid despite new conditions

BBVA confirmed on Monday that it will continue with its takeover bid for Banc Sabadell despite the new conditions imposed last week by the Spanish government.

The Basque bank said in a press release that, after evaluating the updated conditions, the operation still creates value for shareholders.

“We are moving forward with the operation. Despite the conditions imposed by the government, this project generates an enormous value for shareholders of both banks,” said BBVA president Carlos Torres.

Among the new conditions set by the Spanish government, the strictest effectively bans the merger for the next three years.

The president of the BBVA defended the deal as a “unique opportunity to build one of the most competitive and innovative banks in Europe.”

The bank said that it will now update and publish all relevant information once it obtains approval of the takeover bid prospectus from the Spanish stock market regulator (CNMV).

“This approval is expected to take place within the coming weeks,” the bank said.

This means that the decision will now rest with the shareholders of the Catalan bank, who must decide whether to accept the acquisition.

Government's conditions

Last week, the Spanish government approved BBVA’s takeover bid for Banc Sabadell but imposed stricter conditions on the acquisition.

The most notable restriction requires that for three years, both banks must maintain separate legal identities and assets, as well as autonomy in managing their day-to-day operations.

According to Spain’s economy minister, Carlos Cuerpo, this entails “autonomous decision-making, especially regarding financing and credit for small and medium-sized businesses, branch networks, and human resources.”

In practice, this measure prevents a full merger during that period, meaning BBVA cannot lay off Banc Sabadell employees and must maintain existing financing conditions for SMEs.

These new conditions complicate the takeover and raise questions about its feasibility. BBVA had previously announced expected synergies of €850 million, which are now likely to be significantly reduced under these terms.