- BBVA, Spain’s second-largest bank, and smaller rival Banco Sabadell have walked away from a planned merger after a price disagreement.
- The two lenders had confirmed a tie-up less than two weeks ago.
- Sabadell had been looking to merge with another Spanish bank for months.
- But BBVA said it’s in no rush to scale its operations since it already has 15% of Spain’s market share.
- Visit Business Insider’s homepage for more stories.
Spanish lenders BBVA and Banco Sabadell have scrapped plans to merge after confirming a tie-up less than two weeks ago.
Discussions collapsed after the banks disagreed over the price of the transaction. Sabadell, which has a market cap of 2.3 billion euros ($2.7 billion), said it would launch a new strategy to prioritize its domestic business after the two parties failed to reach an agreement on the exchange ratio of their shares.
Sabadell’s shares fell 10% on Friday, while BBVA’s rose 2.3%.
Video: What is an IPO? (CNBC)
The objectives of its new strategy are expected to be released in the third quarter of 2021. Sabadell was keen on merging with another Spanish bank for months. A tie-up for the two lenders would’ve been viewed as a crucial round of consolidation at a time when European lenders face financial challenges related to the pandemic-induced economic fallout.
Read More: One of FanDuel’s early investors breaks down how to capitalize on the booming US sports betting industry amid a ‘tremendous decade’ of growth
If the banks had merged, they would have accounted for about 20% to 25% of Spain’s domestic market loans, deposits, and mutual funds, according to the FT.
BBVA, with a market cap of 24.5 billion euros ($29.2 billion), is not short of other options. After agreeing to sell its US operations to PNC Financial for nearly $12 billion, Spain’s second-largest lender told the FT it is no rush to scale its operations because it commands 15% of Spain’s market share.
Read More: Deutsche Bank says you need to own these 10 value stocks set to rise by as much as 52% as Europe gets a grip on COVID-19