BBVA to achieve its goal of merging with Banco Sabadell

Who follows it, gets it. It seems that this proverb perfectly suits BBVA. Basque company to achieve merger with Banco Sabadell. Or at least that is the conclusion reached after the support received at the extraordinary general meeting of shareholders held this Friday. 96.4% approved the increase in capital necessary for the merger with Banco Sabadell. Among this high percentage are large funds that also have a stake in the Catalan fund.

Carlos Torrespresident of BBVA, expressed his gratitude and joy after the approval data was announced. Torres received an “overwhelming majority”, much more than he expected, since he owned 70.75% of the bank’s capital. This Friday, the bank approved a capital increase of 551.9 million euros, representing 19.5% of the bank’s capital, to finance the acquisition of Banco Sabadell.

“We are taking a very urgent step to advance the most attractive project in European banking. We are fully confident in the success of the operation,” Torres said after learning the results of the vote. He added that “The alliance with Banco Sabadell will lead to the creation of a stronger and more profitable enterprise.with greater ability to accompany families and companies in their future projects.

The president of the company expects the acquisition to take place and also believes in the merger, although at this stage he will not have to convince his shareholders or those of Sabadell, but rather the government must approve. The executive has already repeatedly expressed its opposition to the merger of the two entities. So, if the purchase is carried out, they will be able to operate under different brands, even if they belong to the same group. An option that is not BBVA’s favorite, but, as they assure, “it will continue to have great appeal.” But they also believe that the government of Pedro Sánchez will approve their merger.

Currently, pending the relevant authorisations from the National Securities Market Commission (CNMV), the Competition Authority and the European Central Bank (ECB), BBVA has already secured the support of shareholders. And it’s a long way to go, because some of them are owned by Banco Sabadell, so if they said yes to the capital increase of the organization led by Torres, they would also say yes to the takeover bid as shareholders of the Catalan company. In this case, BBVA and Sabadell are shared by more than 70 major investors, including names such as BlackRock, Norges Bank, Goldman Sachs, Vanguard and JP Morgan.

Joaquin Robles, an analyst at the Catalan company. XTB believes that BBVA will finally take control of Sabadell, since most of the major investors are the same in both companies. “The big management companies control about 40% of Sabadell, so With their support, BBVA would only need 10% to 15%. from retailers “exceed 50%,” Robles notes.

The key may come later, since BBVA’s goal is not only to gain control but also to integrate, which would require greater involvement and approval from the government. “The evolution of both companies on the stock market in recent weeks also shows how much investors believe in the success of this operation,” he explains.

For his part, Ricardo Sion, professor at the EAE Business School, emphasizes that in the context of global listed companies, key decisions are usually in the hands of funds and institutional investors. “The approval of these funds for the capital increase suggests that they will also support the takeover bid.“considering that supporting expansion without BBVA’s participation in the proposal would be illogical,” notes Sion.

For the takeover bid to be successful, BBVA would need to acquire 50.01% of Sabadell’s capital. Currently, approximately 51% of Sabadell’s capital is in the hands of these large funds, which increases the likelihood of the operation’s success. “This significant step marks progress in creating a new banking giant in Europe,” says the professor.