Negotiations for a merger between Banco Sabadell and BBVA have concluded without an agreement, as both entities have communicated to the CNMV. Sabadell has indicated that the board of directors has ended the talks “as the parties have not reached an agreement on the eventual exchange ratio of the shares of both entities”, according to the brief note sent to the supervisor. BBVA has limited itself to noting that the talks have ended without an agreement. Both parties, in short, consider them closed without nuances, and Banco Sabadell has issued a statement in which it indicates that it will ignite the domestic business.
The public talks have not lasted two weeks: the negotiations were announced on November 16, hours after BBVA sold its US division. The integration of these two banks had long been on the table of analysts and bankers. But the discrepancies on the exchange and the distribution of power they raised the tension in recent days and ruined by a long-awaited merger that was expected to resolve relatively quickly.
Now, although the market, supervisors and analysts gave their approval to the merger, the issues to be negotiated were not minor: the payment formula (cash and shares) and the distribution of power derived from it: the role of President of Sabadell, Josep Oliu, or the board of directors. These tensions already caused a 5.4% drop for Sabadell in the stock market yesterday, after soaring as a result of the start of the talks.
The CEO of BBVA, Onur Genç, already advanced last week that the operation would only be carried out if it really creates value for the shareholders of the blue entity. BBVA’s ‘number two’, in a bankers conference, also stressed that the bank is not “obliged” to carry out any purchase in Spain and that it had other options to dispose of the funds received with the sale of the division American.
The union of both entities would have added assets in Spain of 612,000 million; It will thus be the second bank in the country, behind the merger of CaixaBank and Bankia. It would have become one of the five largest banks in Europe by capitalization and will have a 28.9% market share in SMEs, which will make it a leader, followed by Santander