Mexico's COFECE Clears BBVA's Acquisition of Sabadell's Mexican Operations Amid Contested Spain Takeover Bid

Mexico's Comisión Federal de Competencia Económica cleared BBVA's acquisition of indirect control over Banco Sabadell's Mexican operations on 23 December 2024, while BBVA's broader takeover bid for Sabadell's parent company remains unresolved in Spain. The COFECE clearance covers Banco Sabadell's Mexican bank and its other Mexican subsidiaries and satisfies one of the conditions of the offer; prudential authorisation from Mexico's banking regulator, the CNBV, was still pending.

COFECE's mandate is limited to assessing the competitive effects of the transaction within Mexican banking markets. The regulator concluded that BBVA's acquisition of indirect control over the Mexican units would not materially harm competition in the relevant domestic markets, although BBVA would gain control of the Mexican business only if its offer for Sabadell's parent succeeded.

HOSTILE BID FOR SABADELL PARENT CONTINUES IN SPAIN

BBVA launched its unsolicited offer for Banco Sabadell in May 2024, seeking to acquire the Catalan lender. Sabadell's board rejected BBVA's approach, saying it significantly undervalued the bank, and the bid has since moved through successive regulatory and shareholder stages without a definitive conclusion.

BBVA already operates the largest bank in Mexico by assets through its BBVA México subsidiary.

OUTSTANDING CONDITIONS IN SPAIN

The overarching BBVA-Sabadell transaction in Spain remains subject to the ongoing review process involving the Spanish securities market regulator, the CNMC competition authority, and acceptance of the offer by Sabadell shareholders holding more than 50% of its capital. Until those proceedings reach a conclusion, Sabadell continues to function as an independent listed entity.