BBVA is optimistic regarding the imminent approval of its takeover bid for Sabadell, aiming to lower exposure to emerging markets. CEO Onur Genc highlighted the submission of remedies and the need for government and regulatory approvals, emphasizing profit potential from Turkey in the next few years.
BBVA, a prominent banking institution in Spain, is optimistic regarding the approval of its hostile takeover bid for Sabadell by competition authorities. This assertion was made by Onur Genc, the Chief Executive Officer of BBVA, during a recent announcement. Genc expressed confidence that the review process would conclude favorably within the coming weeks, despite the initial longer phase 2 review announced in November, which could delay the process until 2025.
BBVA’s proposed all-share offer for Sabadell, initially valued at over 12 billion euros, has faced opposition from the government. However, Genc remains hopeful, emphasizing that the bank has submitted an unprecedented list of remedies intended to facilitate the successful completion of the deal.
Additionally, prior authorization from Spain’s market supervisor, CNMV, is required before the takeover can proceed. The CNMV has indicated that it will defer its decision concerning the authorization of the takeover prospectus, pending the government’s review.
The rationale behind BBVA’s acquisition of Sabadell includes strategic efforts to decrease its exposure to emerging markets such as Mexico and Turkey. Notably, Genc projected that if inflation trends downward, the bank could achieve a net profit ranging between 2.5 billion to 3 billion euros over the next two to three years.
In summary, BBVA demonstrates confidence in its takeover bid for Sabadell, anticipating approval from competition authorities in the near future. Despite the government’s opposition and the necessary reviews by the CNMV, proactive strategies, including submitting a comprehensive list of remedies, signal BBVA’s commitment to finalizing this acquisition. Furthermore, the bank aims to strategically mitigate risks associated with emerging markets while targeting significant profit growth in the coming years.
Original Source: www.marketscreener.com
