BBVA, Sabadell Ditch Merger Talks
November 27 2020 - 3:54AM
Dow Jones News
By Mauro Orru
Talks for a potential merger between Spanish lenders Banco
Bilbao Vizcaya Argentaria SA and Banco de Sabadell SA have come to
an abrupt end, upending a deal that would have created a bank with
a market cap of about 27.5 billion euros ($32.76 billion).
Banco de Sabadell said Friday that negotiations have ended as
the two banks failed to reach an agreement on the exchange ratio of
both entities. BBVA also confirmed talks fell apart.
Shares in Banco de Sabadell fell around 17% at market open,
while BBVA was flat.
The announcement comes less than two weeks after the two banks
had said they were holding discussions, had appointed external
advisors and embarked on a due diligence process.
The missed deal is a setback for consolidation in the
overcrowded European banking sector, which had been gathering
pace.
CaixaBank SA in September agreed to take over small rival Bankia
SA in a merger set to create Spain's largest domestic bank and the
country's third-largest bank by assets.
Intesa Sanpaolo SpA also secured support to acquire UBI Banca,
creating Italy's largest bank by assets and the eurozone's
second-biggest by market capitalization.
As prospects of a BBVA-Sabadell deal have faded, Banco de
Sabadell said it would evaluate alternatives for value creation
with regards to the group's international assets, including British
lender TSB.
The Spanish bank will prioritize the Spanish market as part of a
new plan aimed at increasing profitability and creating value for
shareholders.
While details of the plan are due in the first quarter of 2021,
it is expected to include the expansion of the transformation
program in the Spanish retail market, with a neutral impact on
capital.
Pietro Lombardi contributed to this article
Write to Mauro Orru at mauro.orru@wsj.com; @MauroOrru94
(END) Dow Jones Newswires
November 27, 2020 03:39 ET (08:39 GMT)
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