Cesar Gonzalez-Bueno, CEO of Sabadell, assured that the takeover proposal for BBVA does not make sense.

César González-Bueno, CEO of Sabadell, was convinced at the XV financial meeting of Expansión-Kpmg that the hostile takeover launched by Bbva would not succeed. “This operation is very complicated. There is no point in it,” he said.

In his opinion, this takeover bid will fail because it does not meet three necessary conditions: attractive price, friendly purchasing agreement and social and political support.

Gonzalez-Bueno believes that the valuation that Bbva is offering to Sabadell’s 200,000 shareholders is insufficient. “The premium is only 3%. When the takeover was announced, it was said that Bbva was offering a price 30% higher than the last three months’ price. But the fact is that Sabadell was trading very cheaply,” stated.

Sabadell’s CEO insists that the claim that the bank’s growth on the stock market is due to the takeover bid is a lie. “I deny the biggest one. Sabadell has grown by 60% since January before the operation became known.” pointed out.

The Catalan bank is trying to dissuade its shareholders from a takeover bid through a generous dividend offer that is improving as the operation progresses. Sabadell has committed to distribute $2,900 million to investors between 2024 and 2025, adding cash distributions and return of capital. “In 18 months, our shareholders will receive a return of 30%. This is unprecedented,” he assured.

Gonzalez-Bueno hinted that this amount could be revised upward as Sabadell’s ability to generate profits continues to grow, including in 2025, despite the rate cuts.

Replies to Bbva

González-Bueno spoke at the XV Expansión-Kpmg Financial Forum shortly after Onur Genç, CEO of Bbva, noted in the minutes that this integration is a “textbook operation” due to the high complementarity of the two banks involved. “There are still many pages left to be written in this book,” Gonzalez-Bueno said.

The CEO of Sabadell refuted some of the data provided by Bbva regarding this operation and its impact on the level of optimal competition. “Bbva says that only 1.5% of SMEs work exclusively with two banks. They took this data from a sample of just 160,000 companies. We believe the overlap is about 40%,” Gonzalez-Bueno said.

“All the scientific literature, of which there is a lot, suggests that as a result of banking integration, the ability to access loans is lost, both in quantity and in price. Both Bbva and Sabadell are very strong in the SME space. In addition, we must take into account that in recent years almost all savings banks and Popular, a very important player in this segment, have disappeared,” said.

In his opinion, What Europe needs now are cross-border mergers, not between banks in the same country. Gonzalez-Bueno dared to call Bbva “the Mexican bank in euros.” Mexico generates about 60% of the group’s profits.