BBVA Proposes Measures to Get Sabadell Deal Approved by Competition Watchdog

By Elena Vardon

Banco Bilbao Vizcaya Argentaria laid out measures to address the concerns Spain's competition regulator has over its hostile takeover offer for Banco de Sabadell in a bid to get the deal authorized promptly.

BBVA's proposed measures are focusing on the Catalonia and Valencia regions where the two banks have the most overlap. The lender said it won't close branches in areas where there aren't others nearby and will keep commercial conditions for individuals as well as small and medium-sized enterprises in places where less than four financial entities operate.

BBVA will also maintain credit lines for all SMEs for 18 months as well as the current volume of total credit for businesses that work with BBVA and Sabadell, it said late Wednesday.

Sabadell declined to comment.

The regulatory body known as the CNMC has said BBVA's offer for its smaller peer required further in-depth analysis, drawing out a takeover battle between the two lenders. It said the risks it sees from the potential tie-up include worsening of commercial conditions for clients through reduced lending to SMEs and access to physical branches and ATMs for individuals.

BBVA went hostile in its pursuit of Sabadell in May after it encountered opposition from its smaller rival's management. The European Central Bank greenlit the deal but approval is still pending from Spanish regulators and Sabadell's shareholders. The Spanish government has also said that the transaction raises concerns.

The potential combination is expected to deliver around 850 million euros ($896.4 million) in synergies, BBVA has estimated. These include 450 million euros from administrative and technology savings, 300 million euros from personnel and 100 million euros from financing services.

The initial bid valued Sabadell at 11.53 billion euros but this has fluctuated since as the all-share nature of the offer ties it to the stock price of both banks.

Write to Elena Vardon at elena.vardon@wsj.com

(END) Dow Jones Newswires

November 21, 2024 03:52 ET (08:52 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.