BBVA's takeover bid for Banco Sabadell: a battle between Madrid and Brussels

More than a year ago we published an article anticipating the possible effects of BBVA's takeover bid for Banco Sabadell. 

Table of contents

1. Introduction

2. Chronology of the takeover bid: from the announcement to institutional tension   

3. The conflict of interest: Madrid vs Brussels   

4. Economic and financial implications     

5. Summary table

Introduction

Today, that unsolicited operation - a hostile takeover bid - has become one of the greatest sources of economic and political tension in Spain. A hostile takeover bid occurs when one company attempts to acquire another without the backing of its management. Although rare, there are precedents in Spain, such as the takeover of Endesa by Enel in 2007.

BBVA's offer has generated a conflict between the Government, which fears a loss of employment, bank concentration and territorial impact. On the other hand, there are the business interests of BBVA itself, which seeks to strengthen its position in the market. seeks to strengthen its positionand of some Sabadell shareholders, who welcome the operation. Meanwhile, the ECB considers that there are too many small banks in Spain, which weakens the competitiveness of the European financial system as a whole.

Chronology of the takeover bid: from the announcement to institutional tension

The transaction began in April 2024, when BBVA launched an unsolicited takeover bid for Banco Sabadell, without the prior backing of its management. the prior backing of its management. Sabadell's board immediately rejected the proposal as insufficient and detrimental to the bank's independent project.

The BBVA takeover bid is a complex transaction that has been underway for a year.

Far from withdrawing, BBVA persisted and, in May 2025, submitted an improved offer, intensifying the pressure on Sabadell's board and shareholders. This second move raised the institutional profile of the case and attracted the attention of the main regulators. The CNMC expressed concern about the impact the merger could have on banking competition. banking competition in certain areas of the country, especially in Catalonia and the east of the peninsula. The ECB, on the other hand, was more favorable to the operation, pointing out that the Spanish banking market is excessively fragmented, with too many small banks, which affects its efficiency and competitiveness in the European context.

The markets reacted with volatility, and both entities activated their respective communication strategies. In this climate, the government organized a non-binding citizen consultation. Although the turnout was low and around 80-85 about 80-85 % of the voters rejected the takeover bid, the consultation lacked basic guarantees.The consultation lacked basic guarantees such as identity authentication, which allowed multiple voting and cast doubt on the reliability of the result. Business and financial sectors criticized the initiative as a political maneuver with no real effect on the process.

The conflict of interest: Madrid vs Brussels

The clash between the Spanish government and the European Commission reflects a deep tension between national and supranational interests. The Spanish government is opposed to the takeover bid for several reasons: it fears that the bank concentration The Spanish government is opposed to the takeover bid for several reasons: it fears that bank concentration will lead to job losses and branch closures, especially in regions where Banco Sabadell has strong roots, such as Catalonia. In addition, it defends the protection of the "general interest" and financial diversity to avoid excessive concentration that could affect the system and the local economy.

For its part, Brussels, represented by the European Commission and the European Central Bank (ECB), sees no significant impediments. It appeals to market freedom and the principles of competition that govern the European single market. The ECB stresses that worldwide, bank concentration has been growing, giving rise to huge banks with greater capacity to invest and compete globally. and compete globally. In this context, the Spanish market is one of the least concentrated in Europe, with too many small entities that hinder the efficiency and international competitiveness of the sector. Therefore, for the ECB, the merger between BBVA and Sabadell is a necessary way to strengthen the position of the Spanish financial system in the European and global market.

Legally, the CNMC approved the takeover bid on April 30, 2025 after almost a year of analysis, imposing conditions focused on ensuring that areas with little supply of banking services would not be undersupplied after the transaction. The CNMC referred the case to the Ministry of EconomyThe CNMC referred the case to the Ministry of Economy, which must decide whether to impose additional conditions for reasons of general interest. Although the Government can resort to legal tools, its direct intervention is usually complicated when the main regulators, CNMC and ECB, have approved the operation.

Politically, the Government's opposition also responds to strategic and national motives, beyond economics: protecting Sabadell's Catalan identity identity of Sabadell and to maintain a banking network that reflects the territorial and social diversity of the country.

Economic and financial implications

The acquisition of Banco Sabadell would allow BBVA to significantly increase its size and assets, consolidating its position as one of the leading banks in Spain and improving its competitiveness in Europe. The merger would strengthen its investment capacity and give it greater weight in key markets.

BBVA would benefit from the operation with greater competitiveness at the European level.

Among shareholders, the takeover bid generates divided positions. International funds such as BlackRock and Norges Bankwhich are major shareholders, support the operation for its potential to increase value and efficiency. However, other shareholders, along with Sabadell's management, are opposed, concerned about the likely loss of autonomy and market position.

Banking consolidation also raises concerns about reduced competition in Spain, a historically fragmented market. Although it may improve financial financial stability and the soundness of the systemAlthough it may improve financial stability and the soundness of the system, it also raises concerns for workers who could lose their jobs and consumers who will face a more concentrated market and likely worse conditions.

Conclusion

BBVA's takeover bid for Banco Sabadell reflects the complexity and multitude of issues that characterize large banking transactions. large banking operations in Europe. in Europe. This process has revealed a clash between national interests, represented by the Spanish government, and supranational interests, led by the European Commission and the ECB. While Madrid seeks to protect regional diversity and employment, Brussels promotes concentration to improve the competitiveness of the European market.

It is difficult to know which interests will prevail. What for some may be a very beneficial operation in economic and power terms, for others may mean job losses or worsening conditions. This shows how difficult it is to evaluate when these types of mergers are positive or negative for society as a whole, due to the diversity of impacts and actors involved.

What is clear is that, whatever the outcome, it will affect us in one way or another.

Summary table 

Introduction	-Economic and political tension in Spain. -Conflicts of business interests.
Chronology of the takeover bid: from the announcement to institutional tension	-Chronology of the operation. -Concern about the impact of the merger.
The conflict of interest: Madrid vs Brussels	-Fear of bank concentration. -Intervention of the Ministry of Economy.
Economic and financial implications	-Increase in BBVA's size and assets. -Diminished competition in Spain.

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