Background on BBVA and Banco Sabadell
BBVA, a Spanish banking group, and Banco Sabadell, a Catalan bank, are two significant players in the Spanish financial sector. BBVA is the second-largest bank in Spain, operating in over 25 countries worldwide. Banco Sabadell, established more than 144 years ago, is also a prominent banking entity with a strong presence in various international markets.
BBVA’s Hostile Takeover Attempt
In an attempt to create a powerful banking entity capable of competing with industry giants like Santander, HSBC, and BNP Paribas, BBVA launched a hostile takeover bid for Banco Sabadell. The proposed acquisition valued Sabadell at approximately €17 billion.
The Outcome of the Takeover Attempt
On Thursday, the Spanish securities market regulator, Comisión Nacional del Mercado de Valores (CNMV), announced that BBVA’s hostile takeover offer was accepted by only 25.33% of Banco Sabadell’s capital.
According to analysts from Jefferies, this acceptance rate was “very far below the expected level,” rendering the operation ineffective. The news was met with satisfaction from both Banco Sabadell and the Spanish government, which had opposed the takeover.
Reactions from Key Figures
Banco Sabadell’s president, Josep Oliu, expressed his delight in a statement: “It is a great satisfaction to confirm that Banco Sabadell will continue independently and advance in the history of serving its clients, which began more than 144 years ago.”
On the other hand, BBVA’s president, Carlos Torres Vila, acknowledged the missed opportunity in a press conference: “We respect (the decision of Sabadell’s shareholders) and close this chapter. I have no intention of resigning despite this setback.”
European Regulatory Infringements
The failed hostile takeover attempt has led to Spain facing a procedure of infringement regarding European regulations. The European Union (EU) formally warned the Spanish government in July that BBVA’s conditions for acquiring Sabadell violated European regulations.
The EU highlighted that BBVA’s prerogatives “invade the exclusive competencies of the European Central Bank and national regulators, contravene EU banking rules, and restrict the freedom of establishment and free circulation of capital.”
Key Questions and Answers
- What was BBVA’s goal with the hostile takeover attempt? BBVA aimed to create a powerful banking entity capable of competing with industry giants like Santander, HSBC, and BNP Paribas by acquiring Banco Sabadell.
- What percentage of Banco Sabadell’s capital was accepted in BBVA’s takeover offer? The offer was accepted by only 25.33% of Banco Sabadell’s capital.
- Why did the EU warn Spain about BBVA’s takeover attempt? The EU warned Spain that BBVA’s conditions for acquiring Sabadell violated European regulations, specifically infringing on the exclusive competencies of the European Central Bank and national regulators, contravening EU banking rules, and restricting the freedom of establishment and free circulation of capital.
