Spanish Lenders BBVA and Sabadell Abandon Merger Talks

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BBVA and Sabadell called off their merger talks, a sign that consolidation in Europe’s fragmented banking system remains complicated

Banco Bilbao Vizcaya Argentaria SA, Spain’s second-largest lender by assets, and smaller peer Banco de Sabadell SA ended their merger talks because of disagreements over pricing, underlining thatThe banks disclosed the talks less than two weeks ago. BBVA said on Nov. 16 that it was conducting due diligence on Sabadell afterin the U.S. to Pittsburgh-based PNC Financial Services Group Inc. for $11.6 billion.

European banks have faced intensifying pressure to merge as they struggle to make money in a negative-rates environment and as the pandemic pummels the economy. Shares of most of the region’s lenders have fallen sharply this year, with Sabadell—with its exposure to corporates and small businesses in Spain—declining more than 60%.Another duo of Spanish lenders, CaixaBank SA and Bankia SA, agreed to merge in September. In Italy, Intesa Sanpaolo SpA is buying smaller rival UBI Banca SpA.

 

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