Spain’s banking sector is facing a major shake-up as Banco Bilbao Vizcaya Argentaria, or BBVA (BBVA) (ES:BBVA) launches a €14.8 billion ($17.3 billion) takeover bid for rival Banco de Sabadell (ES:SAB). The deal highlights BBVA’s strategy to consolidate market share and strengthen its position in the industry.
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Sabadell and BBVA are two of Spain’s leading banks, both providing a full suite of financial services. Following the announcement, Sabadell shares rose 0.65% in Spain, while BBVA gained 0.54% at the time of writing.
Details of the Offer
Under the deal terms, BBVA is offering one newly issued share plus €0.70 in cash for every 5.5483 Sabadell shares. Based on current market prices, the offer values Sabadell at about €14.8 billion. Meanwhile, shareholders have until October 7 to tender their shares, with the results expected to be announced a week later, on October 14.
The bid was approved last week by Spain’s securities regulator, CNMV (National Securities Market Commission). Notably, it is drawing close attention not only from investors but also from the Spanish government, which has set conditions restricting how quickly BBVA can integrate Sabadell.
BBVA’s Deal Rationale
BBVA is pitching its takeover bid as a way to strengthen its position in Spain and expand further in Europe. The bank expects annual cost savings of nearly €900 million by 2029, up from an earlier estimate of €850 million. Additionally, its latest disclosures show a shift from €2.1 billion in badwill it once projected to €477 million in positive goodwill if it takes full control of Sabadell.
Back in May 2024, Sabadell rejected a €12 billion merger proposal from BBVA, arguing it undervalues the bank and ignores its standalone growth potential.
While BBVA could lower its acceptance threshold to 30% of voting rights, it has ruled out raising its bid, signaling a high-stakes push for scale. The final decision now rests with Sabadell’s shareholders, who face weighing BBVA’s long-term value pitch against near-term risks and government merger restrictions.
What Is the Target Price for BBVA Stock?
According to TipRanks, BBVA stock has a Strong Buy rating based on seven Buys assigned over the last three months. The BBVA’s share price forecast is €16.89, which is 7.65% above the current price level.
