BBVA is offering a new stake issued by the bank for 4.83 of Banco Sabadell if the merger between the two entities goes ahead, representing a 30% premium compared to the closing value on April 29.
This was stated in the letter sent by BBVA to Sabadell, which the Basque entity announced yesterday defending that the proposal is “very attractive to shareholders.” BBVA is also offering the Catalan bank three seats on its board – one for vice-president – and proposes to have a dual corporate headquarters, keeping the headquarters in Sant Cugat and “full commitment to Catalonia”. The bank says it will maintain the Sabadell brand along with the BBVA brand in areas where it may have “relevant business interests.”
“The new entity will become one of the largest and most solid entities in Europe, with total assets of more than €1 billion and more than 100 million customers worldwide,” he says. In addition, he considers that it will become “the number one bank by market capitalization in the euro area.”
According to BBVA, the two entities have “strategic fit” and “complementarity.” “Banco Sabadell’s presence in the UK will add to BBVA’s global scale and leadership in Mexico, Turkey and South America,” the bank says. In particular, BBVA estimates that the capacity of the new entity to facilitate credit will be amplified by up to an additional €5,000 million per year.
Minister warns of possible ERO
Deputy Prime Minister Yolanda Díaz warned of the “danger” of the merger of BBVA and Banco Sabadell through increased banking concentration.
He stated in statements to the self-evaluation report that this concentration had increased from 40% to 70% and added that this new merger would only exacerbate “systemic risks.” Additionally, expect the process to be followed by an ERO process, with offices closed. On the other hand, he considered the head of the Executive Directorate, Antonio Garamendi, to be “a little more politicized than on other occasions,” and asked him to maintain his institutional role.
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