Shares in Banco de Sabadell rallied strongly today, 24 July 2026, as market speculation intensified that BBVA's long-running hostile takeover bid could be nearing approval. The stock climbed as much as 6.2% in early trading on the Madrid exchange before settling around 4.8% higher by midday, making it one of the best performers in the European banking sector.
The surge follows reports that European competition authorities are expected to give the green light to the €12 billion all-share offer, which has been stalled since its launch last year. Analysts at several investment banks noted that a successful merger would create Spain's largest domestic lender by assets, potentially unlocking significant cost synergies and improving profitability. 'The market is pricing in a higher probability of deal completion,' said one Madrid-based analyst, speaking on condition of anonymity.
For UK investors, the rally highlights the interconnected nature of European financial markets. Many British pension funds and investment trusts hold stakes in Spanish banks through diversified European equity funds. While the FTSE 100 edged up just 0.1% to 8,214 points today, the broader Stoxx Europe 600 Banks index rose 0.9%, reflecting the positive spillover from Sabadell's gains. Lloyds Banking Group and Barclays, both heavily traded in London, saw modest upticks of 0.3% and 0.5% respectively.
The takeover saga has drawn attention from UK regulators as well, given BBVA's significant operations in London. The Bank of England is understood to be monitoring the deal's progress for potential implications on financial stability. Investors should note that cross-border bank mergers remain politically sensitive, and any unexpected regulatory hurdles could reverse today's gains.
From a sector perspective, the rally comes amid a broader recovery in European bank stocks, which have been boosted by rising interest rates and improved net interest margins. However, analysts caution that the Sabadell-BBVA deal is not yet done, and shareholders should brace for volatility. 'We are not out of the woods yet,' one analyst warned, 'but the direction of travel is positive.'