CNMV Suspends Trading as Spanish Government Approves BBVA’s €14 Billion Bid for Sabadell With Three-Year Merger Ban; Sabadell Sells TSB to Santander for £2.65 Billion

The Spanish National Securities Market Commission (CNMV) suspended the trading of BBVA and Banco Sabadell shares pending the Spanish government's decision on BBVA's €14 billion takeover bid (OPA) for Sabadell. The government approved the OPA but imposed strict conditions, requiring both banks to operate as separate entities for at least three years, effectively blocking their merger during this period. Additional conditions include protections for employees, branch networks, and financial inclusion for vulnerable groups. BBVA must now decide whether to proceed with the offer under these constraints or withdraw it, with the possibility of legal action against the government.

Despite the restrictions, BBVA has signaled its intention to continue with the bid, pending investor support. Meanwhile, Banco Sabadell has agreed to sell its British subsidiary, TSB Bank, to Banco Santander for approximately £2.65 billion (around €3.4 billion or $3.6 billion). This sale, which includes a planned extraordinary dividend of €3.8 billion for Sabadell shareholders, adds complexity to BBVA's takeover attempt. Sabadell's management maintains that the TSB sale is independent of the OPA and denies it is a defensive move against BBVA. The CNMV has mandated Sabadell to hold two extraordinary general meetings on August 6 to approve the TSB sale and the associated dividend. The sale strengthens Santander's position in the UK market, making it the third-largest bank there. The ongoing OPA and the TSB sale have created tension among Sabadell shareholders, who face decisions regarding the dividend and the takeover offer. Analysts suggest BBVA may need to improve its offer price due to these developments. The situation remains fluid, with BBVA expected to announce its definitive decision soon.