Spain’s second-largest bank is edging closer to creating Europe’s third-largest lender by market value, behind only HSBC and Santander.
BBVA has raised its hostile takeover offer for Banco Sabadell by 10% to €17 billion (about $20 billion). The revised allshare proposal—one BBVA share for every 4.8376 Sabadell shares—would eliminate the earlier cash component. The silver lining is that if more than half of Sabadell’s shareholders accept the deal, they won’t have to pay capital gains tax right away.
With approval from Spain’s National Securities Market Commission, the bid now enters a decisive stage ahead of an October 10 shareholder deadline and opens the door for Sabadell’s investors to consider the offer.
Under the updated terms, the Catalonian bank’s shareholders would hold a 15.3% stake in the merged entity.
Yet, BBVA’s bid continues to draw sharp pushback. Sabadell’s board has unanimously recommended that shareholders reject the offer, arguing that even the improved offer undervalues the bank, particularly given the recent gains from divestments of businesses such as British retail bank TSB.
Sabadell CEO César González-Bueno denounced the bid as “worse than the original,” contending it lacks sufficient premium and may expose shareholders to tax and legal risks if less than 50% accept.
Investors are divided. Major asset managers such as BlackRock, Vanguard, and Norges are viewed as pivotal to the outcome, but their positions remain unclear. Market watchers warn that the 10% increase may not be enough to convince large holders who are already skeptical of regulatory constraints and synergies.
Additionally, Spain’s government has mandated that, even under acquisition, BBVA and Sabadell must remain separate legal entities for at least three years—a requirement some see as limiting the deal’s viability. The European Commission has warned Madrid not to hinder a lawful takeover with disproportionate conditions that could breach EU rules.
If successful, the takeover would elevate BBVA into the top tier of European banking, underscoring a long-awaited wave of consolidation in a sector often seen as too fragmented to compete globally. But with the October deadline looming, whether the bid will overcome political resistance, regulatory constraints, and shareholder hesitation is still far from assured.
