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Bond Market News
Spanish Government Imposes Conditions on BBVA-Sabadell Deal
June 25, 2025
BBVA’s €14bn ($16.26bn) takeover bid for Banco Sabadell has hit a roadblock after the Spanish government ruled that the two banks must operate independently for at least 3 years. The deal, first proposed in May 2024, has since faced opposition from Sabadell’s management and politicians. In April, the deal gained clearance from antitrust body CNMC, but with conditions. If BBVA still decides to proceed, it would require security regulator CNMV’s approval to take the offer directly to shareholders.
However, Sabadell’s management has already rejected the bid, citing low valuation. Meanwhile, Sabadell is exploring the sale of its UK subsidiary TSB, in order to fend-off BBVA acquisition. In the event of a merger, the BBVA-Sabadell alliance would create a Spanish banking giant with over 140,000 employees and reduce BBVA’s reliance on emerging markets. Investors are reassessing the likelihood of a deal with expected delays in quick cost savings and strategic synergies. Bloomberg analysts forecast a drop in return on investment to 13%, vs. BBVA’s original projection of 20%. Some analysts now suggest that BBVA should walk away from the deal and compensate its shareholders with a buyback.
BBVA’s 5.381% 2029s are trading stable at 102.776, yielding 4.56%.
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