MADRID: Spain’s second-largest bank BBVA and smaller rival Banco Sabadell scrapped plans on Friday for a tie-up that would have created a top player as the industry struggles in the economic fallout from the coronavirus pandemic. The two banks announced on November 16 that they were in talks about a possible merger although they stressed there was no certainty that it would be implemented.
The talks were announced at the same time as BBVA said it had agreed to sell its US unit to PNC Financial Services for $11.6 billion, a deal which would mean the lender would not need a capital increase to carry out an operation involving Sabadell.
“Banco Sabadell informs that the board of directors has decided to terminate the... discussions because the parties have not achieved an agreement on the exchange ratio of both entities,” Sabadell said in a statement. BBVA’s offer did not reflect the real value of its business, it added, without giving further details.
For its part, BBVA said in a separate, brief statement that “discussions about a merger with Banco Sabadell concluding without reaching an accord.” The end of talks is a setback to the bank consolidation
under way in Spain, which has been encouraged by the country’s central bank. — AFP
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