BBVA is optimistic about the approval of its takeover bid for Sabadell, with expectations of a decision in weeks. The bank aims to reduce exposure to emerging markets, forecasting potential profits of up to 3 billion euros in the coming years.
BBVA, the Spanish bank, remains optimistic regarding the approval of its hostile takeover bid for rival Sabadell, as expressed by Chief Executive Officer Onur Genc on Wednesday. This all-share offer, valued at over 12 billion euros, was subject to a longer phase 2 review initiated by antitrust authorities, which may delay the process until 2025 due to government opposition.
Genc emphasized the bank’s belief that the competition authority will grant approval within the forthcoming weeks, stating, “Our conviction is that the competition authority will give the green light to the process in the next few weeks … we’re very close to the end of that process.” He also noted that BBVA has presented an unprecedented list of remedies to facilitate the completion of the deal.
Furthermore, the Spanish market supervisor, CNMV, must also authorize the deal and has indicated it will wait for the government’s position before making a decision. An additional motive behind acquiring Sabadell is to minimize BBVA’s exposure to volatile emerging markets such as Mexico and Turkey, where Genc forecasted the bank could achieve a net profit ranging between 2.5 billion to 3 billion euros in the next few years if inflation trends are favorable.
In summary, BBVA is confident in securing approval for its takeover of Sabadell, with expectations that the competition authority will decide favorably soon. Underlining the strategic need to reduce higher-risk market exposure, the bank anticipates significant profit gains from its operations in emerging markets if current inflation trends persist favorably.
Original Source: www.marketscreener.com
