The ECB would be in favor of a merger between BBVA and Banco de Sabadell

Photo credit © Banque de France

( — One less obstacle for BBVA ? The European Central Bank would be in favor of a merger between Banco Bilbao Vizcaya Argentaria and Banco de Sabadell, according to ‘traditional’ sources close to the ‘Bloomberg’ file. The euro zone banking regulator reportedly sees Sabadell’s focus on lending in Spain as a counterbalance to BBVA’s focus on emerging markets like Mexico and Turkey. A larger balance sheet would also help diversify Sabadell’s exposure to small and medium-sized companies, sources said.

The ECB would have preferred an amicable agreement between the two parties but it would still be in favor of such a rapprochement even in the context of a hostile transaction. The regulator is not actively trying to move the deal one way or the other, the agency said. Support from the ECB would be very useful for BBVA as it would speed up obtaining the necessary approvals if shareholders of both groups accept the current offer. It could also facilitate negotiations between the bank and the regulator on future capital requirements for a combined entity. However, the Spanish government came out against BBVA’s offer, with Economy Minister Carlos Cuerpo saying he had the final say on the merger project.

The second Spanish bank launched a hostile takeover bid last week on Sabadell after its competitor had rejected a friendly offer a few days earlier. It offers an all-stock transaction with an exchange ratio of one newly issued BBVA share for 4.83 Sabadell shares.


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