The Kaipher Editorial Team 
Spain’s securities regulator has cleared the final hurdle for BBVA to proceed with its €14.9 billion hostile takeover bid for Banco Sabadell, marking a pivotal moment in what has become Europe’s most contentious banking consolidation battle. The approval from the National Securities Market Commission (CNMV) on Friday allows the bid to formally open to shareholders on Monday, September 8, with acceptance running through October 7.
The authorization concludes more than 16 months of regulatory scrutiny since BBVA first announced its surprise bid in April 2024. The transaction would create Spain’s second-largest bank with over €1 trillion in assets, trailing only CaixaBank in size.
Deal Terms and Shareholder Decision
Under the approved terms, BBVA is offering one newly issued share plus €0.70 in cash for every 5.5483 Sabadell shares, valuing the target at approximately €2.98 per share. The offer represents a significant premium over Sabadell’s pre-announcement price, though current market dynamics have complicated the arithmetic.
The deal’s success hinges largely on institutional investors, particularly BlackRock, which recently increased its stake to over 7% and now stands as Sabadell’s largest shareholder. Other major stakeholders include Zurich Insurance at 4.7% and Mexican entrepreneur David Martínez at 3.5%. Notably, retail shareholders control approximately half of Sabadell’s capital, making their decision crucial to the outcome.
BBVA has also received permission from the U.S. Securities and Exchange Commission to lower its acceptance threshold from 50% to 30% of voting rights, though this would trigger mandatory additional cash offers for remaining shares.
Government Constraints and Legal Challenges
The Spanish government’s conditional approval in June imposed substantial restrictions that threaten to undermine the deal’s economic rationale. Madrid mandated that the banks operate separately for at least three years, potentially extending to five years, preventing the full integration BBVA seeks.
These conditions have prompted BBVA to revise its synergy expectations upward to €900 million from €850 million, but delayed their realization until 2029 rather than the originally planned 2028. The bank has challenged these restrictions in Spain’s Supreme Court, arguing they exceed governmental authority.
The European Commission has also launched infringement proceedings against Spain, contending that Madrid’s intervention violates EU banking law and restricts capital movement within the single market. Brussels argues that such political interference undermines the Banking Union’s objectives and the push for European banking consolidation.
Opposition and Market Dynamics
Sabadell’s board maintains its opposition to the bid and has ten working days from Monday to issue its formal recommendation. The bank has implemented multiple defensive measures, including the €2.8 billion sale of its UK subsidiary TSB to Santander and announcing €6.3 billion in shareholder returns through 2027.
Current market conditions present a challenge for BBVA, as Sabadell’s shares have traded above the offer price since January, making it more profitable for shareholders to sell in the open market than accept the bid. This dynamic has led analysts to expect BBVA to sweeten its offer, though the bank has repeatedly ruled this out.
The outcome will test whether political resistance can effectively block market-driven consolidation in Europe’s fragmented banking sector, with implications extending far beyond Spain’s borders to similar cross-border merger attempts across the continent.
