BBVA loses $19 billion bid for Sabadell

BBVA’s Proposal for Sabadell Fails

MADRID, Oct 16 – Spain’s BBVA, which recently aimed to acquire Sabadell, saw its 16.32 billion euro ($19.07 billion) takeover bid rejected. This outcome ended an 18-month contentious takeover battle that had garnered significant public scrutiny.

BBVA’s Chairman, Carlos Torres, who put forth the proposal, described the development as disappointing but stated that he has no plans to step down. After acknowledging the bid’s failure, he expressed optimism for BBVA’s future in a video.

Interestingly, the response from Sabadell shareholders was lower than expected; they backed only 25.47% of the voting rights—this is notably under the minimal threshold that BBVA could have utilized. Analysts had anticipated acceptance rates between 30% and 50%, making this result particularly surprising.

Following the announcement, BBVA’s stock rose about 7% in the U.S., a small silver lining amidst the disappointment.

BBVA aimed to gather support from at least 50% ownership of Sabadell shares but could have adjusted to a 30% requirement. In this case, not reaching even that reduced benchmark was, well, unexpected. For context, BBVA’s initial move into Sabadell began in April 2024, but the situation escalated into a hostile bid shortly after.

The bid faced stiff opposition, including concerns over potential job losses, leading to a drawn-out competition review process. Consequently, the government intervened to impose conditions that would delay any full merger for a minimum of three years.

Despite these setbacks, BBVA is focused on its ambitions. With plans to enhance its standing as one of Europe’s largest lenders, the bank seeks to concentrate on domestic growth after a period of rapid international expansion. It is also worth noting that regulators in the Eurozone have called for bank consolidation to bolster the sector, though the response remains mixed due to job preservation concerns.

On a positive note, BBVA reaffirmed its commitment to a new strategic plan during a board meeting. The plan outlines objectives aimed at achieving a cumulative profit of 48 billion euros over four years and 36 billion euros in shareholder distributions, all without involving Sabadell.

Furthermore, BBVA plans to restart shareholder remuneration from October 31, kicking off a pending share buyback of approximately 1 billion euros. In November, the company intends to distribute a record interim dividend of 0.32 euros per share, alongside aspirations for an extensive share buyback program pending European Central Bank approval.