The European Central Bank (ECB) has approved BBVA’s proposed acquisition of Banco Sabadell, marking a critical milestone in the merger of two major Spanish banks.
BBVA Chair Carlos Torres Vila hailed the decision as “a new, and very significant milestone that also demonstrates the soundness and solvency of this undertaking,”
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BBVA initiated its offer to Banco Sabadell shareholders on 9 May. Following a 96% approval for the necessary capital increase during an extraordinary shareholders’ meeting on 5 July, the ECB’s green light moves the process forward.
Moreover, the deal now awaits approvals from Spain’s financial market regulator (CNMV) and its Market and Competition Commission (CNMC).
Vila expressed optimism about the project’s trajectory, stating: “in due course we will receive the remaining approvals and move forward with the most attractive project in the European banking sector.”
He also highlighted the merger’s expected benefits, including an additional €5bn ($5.2bn) in annual lending capacity for families and businesses.
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By GlobalDataFurthermore, the merger provides benefits for a variety of parties. Banco Sabadell shareholders are expected to gain a 50% premium on pre-announcement share prices, 27% greater earnings per share (EPS) than Sabadell’s standalone expectations, and a 16% interest in the combined business. BBVA shareholders are projected to earn good profits with minimal capital effect, while clients would have access to a broader choice of financial services.
Employees of both banks are poised to benefit from enhanced career opportunities, and the merged institution will significantly contribute to Spain’s economic growth through increased lending and higher tax contributions.
Once BBVA acquires a majority stake of 50.01% in Banco Sabadell, the banks plan to merge, subject to additional regulatory approvals.
This development solidifies BBVA’s strategic vision and sets the stage for a transformative shift in European banking.
