MADRID (Reuters) -Spain’s BBVA said on Thursday it was revising expected cost and funding synergies from its takeover bid for Sabadell, citing higher risks after the government imposed conditions and Sabadell greenlit an important divestment.
However, BBVA said it still believed the takeover would “create value for the shareholders of both entities”.
Its update, filed with stock market regulator CNMV, came a day after Sabadell shareholders approved the sale of its British unit TSB to Santander, along with a 2.5 billion euro ($2.9 billion) one-off cash payout derived from the deal.
BBVA warned that the government’s requirement to keep the two lenders operationally independent for at least three years – extendable to five – would delay some of the benefits of the planned merger.
Previously BBVA signalled that if it kept Sabadell separate it would still be able to generate most of the expected 850 million euros in cost synergies over two years after completing the deal. But Thursday’s filing did not include this figure, which it said is being reassessed.
The lender added it only had access to public information on Sabadell when making its estimates, which could lead to unforeseen liabilities or integration challenges if the deal were to proceed.
Some potential difficulties included the integration of staff, systems and operations, as well as risks of litigation and client attrition.
In addition, BBVA said delays or failure to complete the merger could hurt its share price, reputation and relationships with key stakeholders.
($1 = 0.8593 euros)
(Reporting by David Latona; Editing by Andrei Khalip and David Holmes)
