BBVA's bid for Sabadell hits one-year mark as market awaits regulator's verdict

It's been one year since Bilbao-based banking giant BBVA launched its takeover bid for Banc Sabadell, and all eyes are now on the imminent ruling from Spain's National Commission on Markets and Competition (CNMC).

BBVA's proposal to acquire the Catalan bank was one of the major financial headlines of 2024, and its outcome is expected to shape the economic landscape in 2025.

Financial analysts speaking to the Catalan News Agency (ACN) broadly agree: once the green light comes from regulators, BBVA is likely to sweeten its offer.

"In the end, it’s a battle to see who is stronger," one expert remarked.

The acquisition is seen as a strategic move by BBVA to strengthen its market position in Spain and reduce its reliance on emerging markets like Mexico and Turkey.

Analysts dismissed the idea that Donald Trump's return to power would significantly affect the operation.

Xavier Brun, co-director of the master's degree in finance and banking at UPF, assures that this takeover bid is "completely different" from other bank mergers that have taken place in Spain.

"We are talking about two significant entities, each with its own market share, and their merger would create a major player," he says.

Elisabet Ruiz Dotras, finance professor at the Open University (UOC) says the takeover is taking "longer than would be usual" in other types of companies because it affects banking, a "much more regulated" sector.

Sweetening the deal

BBVA is currently offering one of its shares for every 5.3456 Sabadell shares, plus a cash payment of €0.70. The offer has been slightly adjusted since it was first made, but with Sabadell's stock price outperforming BBVA's, the current deal holds little appeal for Sabadell shareholders, who ultimately have the final say.

BBVA chair Carlos Torres has always denied that an improved offer will be forthcoming, but Dotras disagrees. "I think BBVA is saving something for the last moment," she says.

Sabadell's opposition

Sabadell, for its part, has focused on reaching out to small shareholders. "The marketing is aimed at customers, who obviously do not want to change banks," says Dotras.

According to the financial analyst, the bank, chaired by Josep Oliu, is doing everything possible to make it clear that it is "totally in disagreement" with the takeover bid.

This includes returning its headquarters to Catalonia, which some experts claim is a "political" move to gain "influence" at a certain point in the operation, bearing in mind that if the takeover bid reaches phase three in the CNMC's investigation, the Spanish government will have a say in the final outcome.

OC believes that Sabadell will "bring out the entire arsenal of war" so that the share price rises "as high as possible," to show shareholders that "they have a good strategy" and a "good future" on their own.

April 30 marks exactly one year since BBVA announced its intention to acquire Banco Sabadell.

A week later, Sabadell's board unanimously rejected the offer, arguing that it significantly undervalued the bank’s strategy and future as an independent entity.

On May 9, BBVA bypassed the board and took the proposal directly to shareholders, an aggressive move that was immediately met with resistance from business groups, unions, and political leaders.

One year into the bid, the market is now waiting for the CNMC to issue its decision, with some predicting a possible shareholder vote on the takeover bid towards the end of the summer or during the third quarter.