BBVA calls off deal with Banco Sabadell

November 27, 2020

The financial disagreements broke a deal

Financial disputes are solid reasons for an agreement not to go through. So it seems to be the case between BBVA (Banco Bilbao Vizcaya Argentaria) – one of the largest lenders in Spain and Banco Sabadell, one of its competitors.

Both parties announced on November 16 that they are in talks to merge and create the second-largest bank in Spain, with more than €600 billion in assets. But the two banks called off the arrangements as they haven't reached common ground on the financial terms.

The merge would have favored Banco Sabadell, being considerably smaller than BBVA, and the banking sector as a whole, as the COVID-19 pandemic has impacted it.

BBVA made another deal earlier this month when it sold its American subsidiary to PNC Financial for $12 billion. Still, banks control 15% of the Spanish banking sector.

After the news hit the wire, Banco Sabadell stock price traded 10% lower, while BBVA gained 2.3%.

Sources: cnbc.com

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