BBVA Clears Last Hurdle to Open $17.4 Billion Bid to Sabadell Shareholders — 2nd Update

By Elena Vardon

Spain's BBVA got the last outstanding regulatory approval for its $17.4 billion bid to take over smaller peer Banco de Sabadell and said it would open the offer to shareholders starting next week.

Banco Bilbao Vizcaya Argentaria--as the bank is formally known--went hostile in its pursuit of Sabadell in May last year with the aim of creating one of the biggest lenders in the eurozone after it encountered fierce opposition from the management of its smaller rival.

The bid now values Sabadell at around 14.9 billion euros, equivalent to $17.42 billion, up from 12.2 billion euros when the offer was first floated. The bid is tied to the two banks' stock prices, which have fluctuated as the takeover battle dragged on for more than a year amid several regulatory reviews. The exchange ratio was also adjusted to account for dividend payments.

Spain's National Securities Market Commission on Friday said it authorized the transaction with the understanding that its terms complied with applicable regulations and the prospectus's contents were sufficient following recent amendments.

Shareholders in Sabadell will have from Monday until Oct. 7 to tender their shares to the offer, BBVA said.

Sabadell, which has rejected the offer and repeatedly insisted on its standalone prospects, said Friday that its board of directors would conduct a comprehensive analysis in the coming days before issuing a formal recommendation to shareholders. The board has 10 working days to issue a formal opinion starting on Monday.

The bank has a large base of retail investors--many of whom come from its home region of Catalonia--and their decision on whether or not to tender their shares to the offer will be key to determining Sabadell's future. An association of minority Sabadell shareholders said in a statement that it considers the offer "offensive" and too low.

"It seems like an inadequate offer based on unrealistic assumptions, but we will need to analyze it in detail before giving a full assessment," Sabadell Chief Executive Cesar Gonzalez-Bueno said.

The deal had already been approved by Spain's competition regulator after BBVA put forward remedies to address antitrust concerns. The European Central Bank also gave the go ahead.

The Spanish government added more conditions when it approved the deal, including a ban on a legal merger of the two banks for at least three years--a period in which their entities and assets would have to be kept separate and operate independently.

Despite that setback and Sabadell's sale of its U.K. unit TSB to Santander, BBVA decided to stick with the transaction, saying it still sees value despite the risks. BBVA expects 900 million euros in synergies, up from a previous 850 million-euro estimate, though it anticipates these to be achieved in 2029, one year later than initially planned, due to Madrid's interference.

BBVA said the value of its offer would rise to 17.4 billion euros when adding dividends and buybacks that Sabadell pledged to pay after the TSB sale.

"The union of two highly complementary banks at their best moment has an undeniable logic," BBVA Chair Carlos Torres Vila said on Friday. "Now is the time," he added.

BBVA, whose shares also trade in the U.S., separately said it was authorized by the Securities and Exchange Commission to lower the acceptance threshold of the tender offer to 30% from 50% of voting rights. The bank would then be required under Spanish law to launch a second all-cash tender offer for the remaining shares if it secured between 30% and 50% of voting rights.

BBVA shares in Madrid closed 1.3% lower on Friday, while Sabadell's closed 0.9% in the red.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

September 05, 2025 12:09 ET (16:09 GMT)