The Diplomat in Spain

The Diplomat

BBVA is studying a possible merger with Banco Sabadell and has hired several advisors to analyze the operation, as reported yesterday by the bank in a statement sent to the National Securities Market Commission (CNMV). For its part, Banco Sabadell acknowledged that it has received the proposal and that it is studying it, Europa Press reports.

“In relation to the news that appeared in the press today, BBVA confirms that it has conveyed to the president of the Board of Directors of Banco de Sabadell the interest of the Board of Directors of BBVA in starting negotiations to explore a possible merger between both entities. BBVA confirms that it has appointed advisors for this purpose,” he informed the CNMV.

Banco Sabadell subsequently notified the regulator that it has received an indicative proposal from BBVA for a merger. “The board of directors of Banco Sabadell will adequately analyze all aspects of the proposal,” said the bank chaired by Josep Oliu.

After confirming this possible operation, Sabadell shares rose by around 7.5%, while BBVA’s shares fell 7.5%.

In market capitalization, the group resulting from this merger would reach a market value of 73,000 million euros, according to the current price of both entities, a short distance from Banco Santander, which just exceeds 74,000 million euros, and almost double what CaixaBank capitalizes (37.5 billion).

This is not the first time that both banks have had this operation on the table. Already in 2020, BBVA and Sabadell studied a merger, although they finally ended up rejecting it because they did not reach an agreement on the share exchange ratio. Both banks were then negotiating for 11 days from when they confirmed the talks until they finally considered them broken. BBVA tried to undertake this operation after selling its business in the United States to the bank PNC Financial for 11.6 billion dollars.

If this eventual operation were to be reissued, it would mean putting an end to the other possible transaction that had dominated market rumors in recent weeks: a possible acquisition of Unicaja by Banco Sabadell, something that the Catalan bank has denied on several occasions.

The entity resulting from an eventual integration of Sabadell into BBVA would have global assets of 1,037 billion euros (801,690 million euros from BBVA and 236,135 million euros from Banco Sabadell), with data at the end of the first quarter of the year. If only the assets in Spain are considered, the resulting bank would have assets valued at 637,461 million euros (452,227 million euros from BBVA and 185,234 million from Banco Sabadell).

In the same way, the bank globally would have 7,326 offices (5,912 from BBVA and 1,414 from Sabadell), while in Spain the physical presence would be 3,084 offices (1,881 from BBVA and 1,203 from Sabadell).

Regarding employees, the joint group would have a workforce of 140,776 workers, of which 41,634 would be in Spain.

The interest in this possible operation is communicated just when both banks have just informed the market of their first quarter results. Banco Sabadell obtained a net profit of 308 million euros between January and March, 50.4% more; while BBVA recorded net profits of 2.2 billion euros, 19.1% more than a year before. The total income (gross margin) of both entities was 9,662 million euros until the month of March, 1,444 million in the case of Sabadell and 8,218 million euros for BBVA.