BBVA's $19 Billion Hostile Takeover Bid for Sabadell Falls Through

By Elena Vardon

BBVA failed in its attempt to take over Banco de Sabadell, after an all-stock hostile bid that valued its smaller rival at about 16.3 billion euros ($19.08 billion) fell short of the minimum threshold.

Shareholders representing just over a quarter of Sabadell's capital accepted BBVA's offer, Spain's market regulator said late Thursday. The regulator rendered the offer void as the number of Sabadell shares tendered to the bid didn't meet the 30% that was required for the deal to go ahead, it said.

This draws to a close a hostile pursuit that dragged on for nearly 18 months under which BBVA, Spain's second-biggest bank, sought control of Sabadell, the country's fourth-largest lender.

Analysts saw the fight for the future of Sabadell as a test case for consolidation among Europe's banks, which have seen their share prices surge over the past two years as higher profitability, bumper shareholder payouts and the prospect of dealmaking lured investors.

BBVA said it would speed up shareholder returns following the lapse of the Sabadell offer. It said a pending share buyback of around 1 billion euros would start later this month and that it would launch a significant additional stock-repurchase program after receiving approval from the European Central Bank.

New York-listed American depositary receipts in BBVA jumped 6.7% on Thursday.

Sabadell didn't respond to a request for comment.

Banco Bilbao Vizcaya Argentaria--as the lender is formally known--aimed to create a heavyweight that would have ranked as Europe's third-largest bank by market value, after HSBC Holdings and Banco Santander.

The takeover attempt for Sabadell sought to bolster BBVA's presence in its home market to balance out its exposure to emerging markets such as Mexico and Turkey where it makes the bulk of its business. The deal would have complemented BBVA's heft in blue-chip corporate and retail banking with Sabadell's small and mid-sized business client base and footprint in eastern Spain.

BBVA embarked on a pursuit for Sabadell in early May 2024, reviving a first attempt in 2020 that failed due to disagreements over price. But the renewed approach quickly turned hostile. Sabadell's management fiercely defended the independence of the lender, which is based in its namesake town just outside Barcelona.

The bid sparked opposition from politicians, business groups and unions. The proposed deal was cleared by Spain's antitrust regulator with some mitigating measures and got the green light from the European Central Bank.

The Spanish government imposed a further hurdle--if the deal went through, BBVA and Sabadell would have had to remain legally separate and operate in parallel under the same corporate umbrella for at least three years. This would have delayed the extraction of cost savings that are usually a large part of the rationale to pursue a merger.

Sabadell agreed to sell its U.K. unit TSB to Santander in a 2.65 billion-pound ($3.65 billion) cash deal in what was seen as a maneuver to fend off the bid and pledged to hand proceeds to shareholders through extraordinary dividends, but BBVA clinched on.

In early September, BBVA formally put the offer to Sabadell shareholders. Halfway through the acceptance period, BBVA sweetened the bid by roughly a tenth, improving the exchange ratio to 1 BBVA share for every 4.8376 Sabadell shares. Sabadell's management still argued that the improved terms undervalued the bank and its growth prospects.

Based on Thursday's closing prices, the latest offer valued Sabadell at 16.3 billion euros, which represented a 0.6% premium to its market capitalization--a fraction of the premium BBVA originally offered, which quickly shrunk as Sabadell shares rallied.

In recent weeks, both sides engaged in a charm offensive to sway shareholders, hashing out their opposing arguments publicly and conveying confidence that their clashing views would prevail. The tender period closed on Oct. 10.

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

(END) Dow Jones Newswires

October 17, 2025 01:53 ET (05:53 GMT)