BBVA-Sabadell Deal adjusted Again Ahead of Share Exchange
madrid – Banco SabadellS upcoming dividend payment this Friday, August 29th, is prompting another adjustment to the terms of BBVA’s takeover offer. This change impacts the share exchange ratio for Sabadell shareholders ahead of the final prospectus release in September.
The revised exchange rate will now be 1 new BBVA share plus a cash payment of €0.70 per share,for every 5.5483 shares of Banco Sabadell held. this represents a worsening of terms for Sabadell shareholders compared to the previous ratio of 5.3456 shares,meaning they will receive fewer BBVA shares in the transaction.
Consequently, the maximum potential stake Sabadell shareholders could hold in the combined entity, assuming 100% acceptance of the offer, is now reduced to 14.1%. For BBVA, the adjustment means it will need to issue 953 million new shares to complete the acquisition of Sabadell.
This adjustment is an automatic element of the offer,initially outlined in May 2024,which stipulates that any dividends paid by Sabadell will alter the share exchange ratio. Conversely, BBVA dividends would trigger an equivalent cash addition (“metallic fertilizer”) to the offer. The ratio is also adjusted for share buybacks or capital reductions by either bank, with Sabadell adjustments moving downwards and BBVA adjustments moving upwards.
This marks the sixth adjustment to the offer price since BBVA announced its intention to acquire control of Sabadell.
Sabadell Dividend & Future Plans
The dividend being paid this week totals €0.07 per share, or €370 million in cash, and is part of Sabadell’s 2025-2027 shareholder remuneration plan, which aims to distribute approximately €6.3 billion through dividends and share buybacks.
Included within this plan is an unusual distribution of €2.5 billion linked to the pending sale of its UK subsidiary, TSB, to Banco Santander. However, this capital will not be available for distribution to shareholders until well into 2026, as the sale is still awaiting completion.
The eventual sale of TSB will significantly shrink Sabadell’s international footprint, leaving Mexico and its US operations as its primary international holdings.
