Although the European Central Bank (ECB) has approved this offer, BBVA still needs other regulatory approvals for the acquisition to be completed.
ADVERTISEMENTBBVA has recently announced that it has received approval from the ECB for its hostile takeover bid for Banco Sabadell. However, the bank will also need the approval of Spain’s antitrust watchdog CNMC and its stock market supervisor for the bid to go through.
Carlos Torres Vila, BBVA’s chair, said on the bank’s website: “Today we have received the green light from the European Central Bank for our offer to the shareholders of Banco Sabadell. This is a very significant new milestone that further underscores the strength and solvency of this project.
“The combination of Banco Sabadell and BBVA creates a stronger and more profitable entity, which will have an additional lending capacity to families and businesses of €5bn per year. We expect to receive the remaining authorisations within our estimated timeframe and move forward with the most attractive project in European banking.”
BBVA hostile takeover bid opposed by Spanish government
Earlier in May, BBVA had shared a €12.23bn takeover offer directly with the rival bank’s shareholders, offering to exchange one BBVA share for every Banco Sabadell share. This was following Sabadell’s board declining the same deal proposal.
BBVA claimed that the takeover would bring together businesses which were already highly complementary, with the potential to take advantage of significant synergies. As a result, the merged bank would be more competitive, as well as more profitable, potentially attracting more investment too.
This takeover could also be a trigger for European banking consolidation, with several smaller European banks choosing to club together in order to access greater economies of scale and market share, as well as be able to better compete with bigger US banks.
However, the takeover has been opposed by the Spanish government, which has already raised concerns about its impact on jobs, clients and Spain’s financial system. These concerns have also been echoed by local entities and unions, as well as worries about a monopoly potentially being formed, if the takeover is allowed to proceed.
Areas such as Catalonia are expected to be the most impacted, due to a large number of overlapping branches, with Banco Sabadell also being founded there. Catalonia has already seen a number of businesses and banks exiting the region because of secession concerns. As a result, the possibility of more job losses could deal quite a significant blow to the region’s economy.
The Spanish Economy Ministry is able to intervene and prevent any acquisition or merger of a bank, with a six-month period to make a final decison following consultations with a variety of regulators.
If the takeover goes through, some labour unions have said that they would ask for written labour guarantees, as a protective measure.
