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Spain’s banking giant BBVA is charging ahead with its high-stakes play for Banco Sabadell, unveiling a €17.4 billion ($20.4 billion) hostile takeover bid set to formally launch Monday. The move escalates one of Europe’s most closely watched financial battles, with Sabadell’s leadership already blasting the offer as undervaluing the bank’s future.

The bid follows months of strategic maneuvering, regulatory spotlight, and vocal pushback from Sabadell’s board.

The Terms of the Deal

Under the proposed offer, BBVA will exchange one new BBVA share plus €0.70 in cash for every 5.5483 Sabadell shares. The bank pegged the “current equivalent value” at €17.4 billion, a hefty 43% increase from the initial €12.2 billion it floated in April 2024 when merger talks first hit the public stage.

If successful, Sabadell shareholders would own about 13.6% of the newly combined entity, BBVA said.

Sabadell Pushes Back

Sabadell’s chair Josep Oliu wasted no time rejecting the deal, calling it “significantly undervaluing” the bank’s prospects and less attractive than BBVA’s first approach in 2024. CEO César González-Bueno went further, blasting the proposal for “shortcomings and omissions” in its financial modeling.

Still, Sabadell’s leadership left the door slightly open, pledging to conduct a detailed analysis of the bid in the coming days before advising shareholders. But the bank issued stark warnings: shareholders could face an immediate 8% loss in value, lose out on a planned €0.50 dividend, and even trigger new tax liabilities.

A Strategic Power Play

For its part, BBVA is casting the takeover as a transformational merger that would forge one of Europe’s most powerful banking groups.

“The union of two highly complementary banks at their best moment has undeniable logic,” said BBVA Chair Carlos Torres Vila. He called the move beneficial for shareholders, employees, and society alike, urging Sabadell investors to join “a European leader in growth and profitability.”

BBVA claims the deal would deliver a 25% earnings-per-share boost for Sabadell investors compared to going it alone. It also projects annual cost synergies of €900 million by 2029, largely from efficiency gains and savings.

Banking’s Battle of Scale

The hostile bid marks the latest twist in Spain’s most dramatic banking contest in years, highlighting the fierce competition for scale in Europe’s financial sector. For BBVA, it’s a bold gamble to secure efficiency, market dominance, and a long-term growth story — if it can bring Sabadell shareholders on board.