Mergers and Acquisitions: The Untold Story Behind BBVA’s Hostile Takeover of Sabadell

The Spanish banking sector has been hit by a wave of hostilities as BBVA launched a hostile takeover bid for Sabadell, despite the latter’s rejection of the offer. The merger proposal had been made just a week prior, and BBVA offered to exchange 1 share for every 4.83 Sabadell shares, valuing the bank at nearly 11.6 billion euros. However, Sabadell’s board deemed this valuation to be undervalued and remain firm in their decision to remain independent.

The Spanish Government has weighed in on the matter, strongly rejecting the takeover bid due to concerns over its impact on banking concentration and territorial cohesion. This decision now lies with Banco Sabadell’s shareholders, who must determine whether they want to continue operating independently or accept BBVA’s support.

Sabadell is a large retail bank that operates mainly in Spain, with no controlling shareholder. Most of its shares are held by large investment funds and retail investors. Despite BBVA’s attractive offer presented by President Carlos Torres, which includes a premium for shareholders and ownership in BBVA, Sabadell remains resolute in their stance against being acquired.

This ongoing conflict between two major players in the Spanish banking sector has led to tensions between them, with both sides expressing strong opinions on the proposed merger. With regulatory approvals and shareholder decisions required before the takeover can proceed, this process is likely to last more than six months.

As the takeover bid moves forward, Sabadell faces restrictions on defensive actions that limit their ability to respond effectively to BBVA’s offer. Meanwhile, BBVA must navigate through regulatory processes and gain approval from various authorities before completing the acquisition of Sabadell. The outcome of this complex and challenging process will have significant implications for both banks and their shareholders alike.

In conclusion, this hostile takeover bid marks a rare occurrence in the Spanish banking sector but highlights how important it is for banks to maintain control over their operations while navigating complex regulatory environments.