Banco Bilbao Vizcaya Argentaria, S.A. (BME : BBVA) made an offer to acquire Banco de Sabadell, S.A. (BME : SAB) for ?11.4 billion on April 30, 2024. As consideration, 1 newly issued BBVA share will be issued for every 4.83 Banco Sabadell shares. After the merger, Banco Sabadell shareholders would have a 16% stake in the resulting entity. Post completion of the acquisition, the management team of the resulting entity would be made up of executives from both banks. Three members of Banco Sabadell's current Board of Directors, chosen by mutual agreement between both parties, would be proposed to join BBVA's Board of Directors as non-executive directors (at the time the merger is completed). One of these directors would be proposed as one of the vice-chairmen of the Board of Directors. The merged entity would have one of its Group?s operational headquarters in Catalonia, which would be established at Banco Sabadell's corporate centre in Sant Cugat. The corporate name and brand would be BBVA, the use of Banco Sabadell brand would be maintained, together with the BBVA brand, in those regions or businesses where it may have relevant commercial interest.

The merger would be subject to obtaining the relevant authorisations or declarations of non-opposition from the competent supervisors (in particular, the authorisation of the Ministry of Economy, Trade and Enterprise) and from the competition authorities with jurisdiction (in particular, the Comisión Nacional de los Mercados y la Competencia). The terms in this proposal have been approved by BBVA's Board of Directors. As of May 6, 2024, Banco Bilbao Vizcaya Argentaria, S.A. cancelled the acquisition of Banco de Sabadell, S.A. as the Board believes that the Proposal significantly undervalues the potential of Banco Sabadell and its standalone growth prospects. The decision to re-launch the Offer was adopted by a resolution approved by the Offeror?s Board of Directors at its meeting held on May 8, 2024. As of May 9, 2024, the terminated transaction re-opened with same terms offered by Banco Bilbao Vizcaya Argentaria, S.A. i.e. BBVA's attractive offer to Banco Sabadell shareholders contains the same financial terms of the merger that was offered to its Board of Directors on April 30th: an exchange of one newly issued BBVA share for every 4.83 of Banco Sabadell. As of May 9, 2024, BBVA expects the technological integration to take between 12 and 18 months. The new proposal is subject to acquiring more than 50.01 percent of Banco Sabadell, the approval of the Shareholders? General Meeting, and the approvals of the Spanish Market and Competition regulator (CNMC) and the U.K.?s Prudential Regulation Authority, the most important are, of course, ECB and the CNMV and the CNMC, the antitrust authorities in Spain. The closing of the operation is expected to take between six to eight months, once regulatory authorizations have been obtained. As of May 9, 2024, the Board of Directors of BBVA has approved the offer. As of May 21, ECB supported the merger between BBVA and Sabadell, which would facilitate the merger process. As of May 22, 2024, BBVA has appointed public relations firm Kreab to sway government and to influence the public to perceive BBVA?s bid in a positive way on Sabadell bid.

According to BBVA estimates, this transaction is accretive in earnings per share (EPS) from the first year after the merger, achieving an EPS improvement of approximately 3.5% once the savings associated with the merger are materialized with tangible book value per share accretion of 1%, nearly 1%, 20% return on invested capital, which are estimated at around ?850 million before taxes and all of this with a very limited capital impact of around 30 basis points. As of May 31, 2024, Banco Bilbao Vizcaya Argentaria, has agreed to call BBVA?s Extraordinary General Shareholders' Meeting. The General Meeting will be held in Bilbao, at Palacio Euskalduna, 4 Avenida Abandoibarra, on July 4, 2024, on first call, and on July 5, 2024, at the same location and time, on second call. As of May 24, 2024, BBVA bank formalized its hostile bid for Banc Sabadell by submitting the request for approval to the Spanish stock market regulator (CNMV). BBVA must obtain also the European Central Bank and the Spanish National Markets and Competition Commission (CNMC) approval. As of June 11, 2024, The National Securities Market Commission (CNMV) has admitted to processing BBVA's request for approval of its takeover bid for Banc Sabadell. The regulator noted that this step does not imply "any pronouncement" on the resolution regarding the authorization of the offer. The Commission will not authorize the financial transaction until the "non-opposition" of the European Central Bank (ECB) is confirmed. On July 5, 2024, BBVA will hold an extraordinary BBVA shareholders? meeting with the purpose of approving a capital increase, thus moving forward with Banco Sabadell?s offer.

Uría Menéndez Abogados, S.L.P. acted as legal advisor, Goldman Sachs Bank Europe SE, Sucursal en España and Morgan Stanley & Co. International plc acted as financial advisors to Banco de Sabadell. JP Morgan SE acted as financial advisor, UBS Europe SE acted as financial advisor, Rothschild & Co acted as financial advisor, Garrigues acted as legal advisor and DWP acted as advisor to BBVA in the transaction.
Banco Bilbao Vizcaya Argentaria, S.A. (BME : BBVA) cancelled the acquisition of Banco de Sabadell, S.A. (BME : SAB) on May 6, 2024. The board cancelled the deal because the board believes that the Proposal significantly undervalues the potential of Banco Sabadell and its standalone growth prospects. Based on the detailed assessment of the Proposal, the Board has concluded that it is not in the best interest of Banco Sabadell and its shareholders and has therefore rejected BBVA?s Proposal. As of June 25, 2024, Institutional Shareholder Services recommends that BBVA shareholders approve the extension of the takeover bid for Sabadell.