Major Breakthrough for BBVA in Mexico
In a significant development, Mexico’s competition authority has given the green light to Spanish banking giant BBVA to gain indirect control of Sabadell’s Mexican operations. This approval marks a crucial milestone in BBVA’s bid to acquire its smaller Spanish rival.
Global Clearance Secured
Prior to this approval, BBVA had already obtained clearance from the European Central Bank and regulatory bodies in several countries where Sabadell has a presence, including the UK, US, France, Portugal, and Morocco. This widespread clearance underscores the confidence of global authorities in BBVA’s acquisition plans.
Mexico: A Key Market for BBVA
Mexico is a vital market for BBVA, accounting for around half of its overall profit. The competition authority’s approval is based on its conclusion that the deal would have a low probability of impacting competition and free economic activity in the country.
Creating a Banking Giant
The proposed merger would result in a banking behemoth with total assets exceeding 1 trillion euros ($1.04 trillion). This consolidation move would be the latest in Spain’s banking industry, where BBVA is working to address concerns raised by the country’s competition watchdog.
Overcoming Hurdles
BBVA’s initial offer, valued at 12.28 billion euros ($13 billion), has been met with resistance from Sabadell, which rejected the all-share offer in May. Undeterred, BBVA has gone hostile in its second attempt to acquire the country’s fourth-largest lender. The acquisition still requires authorization from Spain’s stock market supervisor, despite opposition from the Spanish government. Shares in BBVA have fallen around 15% since the offer was announced, now valuing it at around 10.25 billion euros.
The Road Ahead
As BBVA navigates the complex acquisition process, its success would mark a significant shift in Spain’s banking landscape. With its sights set on creating a dominant player in the industry, BBVA remains committed to overcoming the remaining hurdles and securing a successful outcome.
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