Spanish banking company BBVA has secured approval from the UK’s Prudential Regulation Authority to take indirect control of TSB, the British banking unit of Banco Sabadell.
This authorisation is a key step in BBVA’s bid to acquire Sabadell, which includes TSB becoming part of the Spanish banking giant.
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The acquisition, valued at more than €12bn ($13.25bn), has been met with resistance from Sabadell, which rejected BBVA’s all-share offer in May 2024.
Despite the opposition, BBVA proceeded with its hostile takeover attempt, following a previous unsuccessful bid in 2020.
BBVA’s offer of one new share for 4.83 Sabadell shares represents a 30% premium over Sabadell’s closing price on 29 April 2024.
However, with a decline in BBVA’s share price since the offer, the premium has reduced to approximately 2%, placing Sabadell’s valuation at around €10.8bn, reported Reuters.
The acquisition would result in a combined entity exceeding €1tn in total assets.
In May 2024, BBVA stated that the process could take six to eight months before it is presented to shareholders, with a minimum approval threshold of 50.01% of Sabadell shares.
In addition to the UK’s approval, BBVA has received clearance from regulatory authorities in the US, France, Portugal, and Morocco, where Sabadell operates.
However, the Spanish Government has expressed opposition to the deal, which still requires authorisation from the European Central Bank, Spain’s stock market supervisor, and its antitrust watchdog.
