BBVA Launches 12.23 Billion Euro Takeover of Sabadell

BBVA Launches 12.23 Billion Euro Takeover of Sabadell

Eduardo Martínez
3 min read

BBVA Launches 12.23 Billion Euro Takeover Bid for Sabadell

Spanish bank BBVA has made a bold move by initiating a 12.23 billion euro takeover bid for its rival, Sabadell, despite facing rejection from Sabadell's board. This strategic maneuver is aimed at creating a formidable banking powerhouse in Spain, offering Sabadell shareholders a substantial 30% premium and a noteworthy 16% stake in the combined entity. If the acquisition proves successful, it would lead to the formation of Spain's largest domestic lender, surpassing Caixabank, and yielding significant cost savings of 850 million euros before taxes. This development occurs within the broader context of Spain's banking sector, which has undergone significant consolidation, transitioning from 55 banks to a mere 10 entities since the 2008 financial crisis. Notably, this endeavor follows previous failed merger discussions between BBVA and Sabadell in November 2020, primarily due to discord over terms.

Key Takeaways

  • BBVA, Spain's second-largest bank, has unveiled a substantial 12.23 billion euro takeover bid for rival Sabadell, despite encountering resistance from Sabadell's board.
  • This acquisition presents an opportunity for BBVA to diversify from its primary market, Mexico, and redirect its focus towards the domestic market in Spain.
  • The proposed deal has the potential to deliver cost savings of 850 million euros before taxes, while affording Sabadell shareholders a 16% stake in the amalgamated financial institution.
  • If successful, the merger would give rise to a bank boasting over 100 million customers and assets surpassing 1 trillion euros, positioning it as the second-largest in Spain, trailing only Santander.
  • The ongoing consolidation within the Spanish banking sector has significantly reduced the number of banks from 55 before the 2008 financial crisis to only 10 presently.


BBVA's audacious unsolicited takeover bid for Sabadell is an endeavor to establish Spain's leading domestic financial institution, effectively addressing the issue of excess capacity within the banking sphere following the 2008 financial crisis. This merger holds the promise of substantial cost efficiencies and would provide Sabadell shareholders with a noteworthy 16% stake in the amalgamated entity. Nonetheless, the prospect of resistance from Sabadell's board and potential regulatory obstacles presents notable challenges. If the amalgamation prospers, the resultant bank would rival Santander in both size and stature, boasting over 100 million customers and assets exceeding 1 trillion euros. Entities and individuals affected by this development encompass the Spanish and Mexican financial markets, BBVA and Sabadell shareholders, as well as European banking regulatory bodies. In the long run, this move is expected to yield a more streamlined Spanish banking landscape, characterized by fewer yet more potent players.

Did You Know?

  • Takeover Bid: A takeover bid is a pivotal maneuver employed in business and finance, wherein an acquiring company endeavors to procure a controlling interest in another entity. In this particular instance, it involves BBVA's pursuit of a takeover bid for Sabadell. This typically transpires through the acquisition of a majority of the target company's shares from existing stakeholders, with the ultimate goal of assuming authority over the target company's decision-making processes.
  • Cost Savings: In this context, cost savings denote the financial gains anticipated by BBVA and Sabadell as a consequence of their merger. Through the amalgamation of their resources, operations, and infrastructures, the new entity is expected to eliminate redundancies and curtail overall expenditures. The stated 850 million euros in cost savings prior to taxes allude to substantial financial optimizations arising from the merger.
  • Banking Sector Consolidation: The banking landscape in Spain has been undergoing a process of consolidation subsequent to the 2008 financial crisis, resulting in a reduction from 55 banks to a mere 10 entities today. Consolidation denotes the act of merging or acquiring smaller entities by larger ones, with the goal of forging a more robust and efficient financial system. In this context, the amalgamation of BBVA and Sabadell signifies a pivotal step in that direction, fostering the creation of a larger bank capable of better enduring market fluctuations and competing with other global banking behemoths.

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