BBVA is offering one new share issued for every 4.83 Sabadell shares, which includes a 30% premium with respect to the closing price on April 29 (before the announcement). This follows the letter sent by BBVA yesterday to the Sabadell Board of Directors, details of which Bolsamania published today.

Following the merger, Sabadell shareholders will have a 16.0% stake in the resulting entity.

The in-kind offer, in addition to representing a 30% premium relative to the closing price on April 29 (before the news was announced), represents 42% relative to the weighted average price of the past month and 50% relative to the weighted average price of the past three months, according to Bolsamania.

According to estimates by the Spanish market news site, this transaction has a positive impact on earnings per share (EPS) as of the first year after the merger, achieving an improvement of approximately 3.5% with merger-related savings, which were estimated at approximately €850 million before taxes.

Furthermore, the tangible book value per share will increase by approximately 1% on the merger date.

The operation will provide a “high return on investment” (approximately 20% for BBVA shareholders). All this, with a negative impact on the CET1 capital ratio of approximately 30 basis points at the time of the merger, with BBVA maintaining its shareholder remuneration policy.

BBVA will exchange Banco Sabadell shares by issuing new ordinary shares whose subscription will be reserved for holders of Banco Sabadell shares and which will be admitted for trading on the Spanish Continuing Market and other markets on which the shares are listed.

The merger will be subject to obtaining corresponding permits or declarations of non-objection from the competent supervisory authorities (in particular, the statement of the Head of the Ministry of Economy, Trade and Business) and the competent competition authorities (in particular, the National Commission for Markets and Competition).

BBVA considers that the above licenses and declarations of non-objection can be obtained in a “satisfactory and timely manner”.

According to Bolsamaña, in the letter addressed to the Board of Directors of Sabadell, BBVA asserts that the combination of the two entities would result in the most attractive industrial project in European banking. In this sense, it highlights the benefits of the merger for both entities, for shareholders, employees, customers and the companies in which they work.