European Central Bank gives the green light to the BBVA - Banco Sabadell operation
BBVA received the approval (non-opposition) of the European Central Bank to its offer to Banco Sabadell shareholders. The green light from the European regulator represents “a new, and very significant milestone that also demonstrates the soundness and solvency of this undertaking,” said BBVA Chair Carlos Torres Vila.
Press kit
BBVA announced its offer to Banco Sabadell shareholders on May 9th. On July 5th, BBVA held an Extraordinary Shareholders’ Meeting where the bank’s shareholders massively approved the capital increase needed to carry out the share exchange with Banco Sabadell shareholders, with 96 percent of the votes in favor. The green light from the ECB was the next step needed to move forward in this process. Looking toward the future, the BBVA Chair expressed his confidence that “in due course we will receive the remaining approvals and move forward with the most attractive project in the European banking sector.”
The BBVA Chair emphasized that: “The Sabadell-BBVA combination will create a stronger, more profitable bank that will have the capacity to lend an additional €5 billion per year to families and businesses.”
This project is good for all stakeholders. BBVA shareholders will obtain high returns on investment with limited capital consumption, while Banco Sabadell shareholders will receive a highly attractive premium ( a 50 percent of the weighted average prices over the three months leading up to April 29, this being the date prior to the announcement of the takeover bid), earnings per share (EPS) of 27 percent¹ higher than if the company were to remain a stand-alone entity, and a 16 percent stake in the bank resulting from the merger. In addition, they will all benefit from BBVA’s shareholder distribution policy, which represents payouts between 40 to 50 percent of profit, and the bank’s commitment to distribute any excess capital over 12 percent².
Furthermore, customers will have access to a better range of products, and employees stand to benefit from further opportunities for professional growth. The resulting bank will have greater capacity to contribute to economic progress and the wellbeing of Spanish society not only through increased lending, but also through higher taxes.
The offer made to Banco Sabadell shareholders remains subject to the approval of the Spanish financial market regulator, the CNMV, to the acceptance of the offer by Banco Sabadell shareholders representing a majority of its share capital, and the approval of the Spanish Market and Competition Commission (CNMC). Once BBVA acquires a stake in Banco Sabadell of 50.01 percent or higher, it plans to merge both banks. This merger is subject to the pertinent regulatory approvals³.
¹Estimate of net profit through to 2026, according to the consensus view among analysts for both entities, as published by Bloomberg on April 29, 2024. This is on the assumption that 100% of Banco Sabadell’s shareholders accept the offer, all the estimated synergies from the merger are effectively achieved, and the buyback program for Banco Sabadell shares is fully completed.
²Pro-forma Basel IV and subject to regulatory approvals.
³Approval by the Spanish Ministry of the Economy, Commerce and Business.
