Banco Bilbao Vizcaya Argentaria SA (BBVA), with a market valuation of approximately €60 billion, has expressed a renewed interest in acquiring Banco Sabadell SA, valued at about €10 billion, potentially catalyzing one of the largest banking mergers in Europe in recent times. This development resurfaces over three years after previous merger discussions disintegrated over valuation conflicts. A successful merger would create a banking giant in Spain, comparable to the current market leader, Banco Santander SA. BBVA’s approach, disclosed via regulatory filings, shows its intent to explore merger negotiations and has been confirmed by Sabadell receiving an initial proposal. Post-announcement, Sabadell’s shares experienced an uptick, while BBVA’s saw a decrease, reflecting the market’s anticipation of a lucrative deal price and potential capital increase considerations by BBVA for the merger funding, possibly involving a share swap. Analysts recognize the strategic move for BBVA to grow its domestic corporate business and UK market presence. The Spanish banking landscape is witnessing an uptick in revenue following a decade of industry restructuring, highlighted by Santander’s recent 10% income increase report for the first quarter. Spanish banks have been central to European banking consolidations, particularly among smaller entities. Sabadell, after resolving earlier issues with its UK division, TSB, remains a prime candidate for either acquisition by larger Spanish banks or as a consolidator of smaller rivals. This interest announcement by BBVA underscores the dynamic nature of the Spanish banking consolidation environment.

Banking and Finance, Mergers and Acquisitions (M&A),Spain, Europe

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