Spain’s banking giant BBVA (BBVA.MC) remains confident that its proposed hostile takeover of smaller rival Banco Sabadell (SABE.MC) will secure antitrust approval in the coming weeks.
BBVA’s Chief Executive Officer, Onur Genc, reaffirmed this optimism on Wednesday, despite regulatory scrutiny and government opposition, Reuters reported.
BBVA’s all-share offer for Sabadell, valued at over 12 billion euros ($12.64 billion) in April, has been under prolonged regulatory review. In November, Spain’s antitrust watchdog initiated a phase 2 review, extending the approval process well into 2025. However, Genc expressed confidence in a favorable outcome, emphasizing the unprecedented list of remedies BBVA has submitted to regulators to address competition concerns.
“Our conviction is that the competition authority will give the green light to the process in the next few weeks … we’re very close to the end of that process,” Genc stated.
Aside from competition authority approval, Spain’s market regulator, the CNMV, must also authorize the deal. However, the CNMV has indicated it will wait for the government’s decision before issuing a final verdict on BBVA’s takeover prospectus.
One of BBVA’s key motivations for acquiring Sabadell is to diversify and reduce its exposure to high-risk emerging markets, particularly Mexico and Turkey. While BBVA has significant operations in these regions, the lender aims to achieve a more balanced risk profile by expanding its footprint in Spain.
Despite macroeconomic challenges, BBVA remains optimistic about its prospects in Turkey. Genc projected that, should inflation continue to decline, BBVA’s operations in Turkey could yield a net profit of between 2.5 billion and 3 billion euros ($2.73 billion) over the next two to three years.
