TWO of Spain’s leading banks- BBVA and Banco Sabadell- could merge, subject to successful talks.
The initiative has come from BBVA, the country’s second-largest bank.
The two entities did explore a merger in 2020 but Sabadell’s board ended discussions over share values of the two banks.
The BBVA has contacted Spain’s monopolies watchdog, the CNMV, to brief them about their move.
Investors reacted quickly on Tuesday, with Sabadell’s share price rising by 5.5% to €1.88 per share- the best since January 2018.
BBVA stock values, on the other hand, fell by 4.9%.
A Sky News report predated the announcement stating a huge merger was on the cards, and that BBVA had hired advisors, including JP Morgan, to set up a deal that would be paid for entirely in shares.
A BBVA statement said: “In relation to the news that appeared in the press today, BBVA confirms that it has conveyed to the Chairman of the Board of Directors of Banco Sabadell the interest of the Board of Directors of BBVA in initiating negotiations to explore a possible merger between the two entities.”
“BBVA confirms that it has appointed advisors for this purpose,” it added.
If the merger were to go through, it would cement BBVA as the second biggest bank in Spain.
Sabadell has a stock market value of close to €10 billion while BBVA has a market capitalization of €60.6 billion.
Even with a merger, Banco Santander would still easily remain as the country’s largest bank.
