France's BPCE buys 7% of Banco Sabadell and seeks a board seat

Groupe BPCE, France's second-largest banking group, has bought about 7% of Banco Sabadell and wants a seat on the Spanish lender's board, the two banks said on Tuesday. The French group says it plans to hold the shares for the long term, and it arrives less than a year after Sabadell's investors turned down a hostile takeover bid from BBVA.

BPCE built the position through market purchases and financial instruments, the banks said. Neither disclosed what it paid. At Monday's closing price of €3.55, a 7% holding, or about 334 million shares, is worth roughly €1.19 billion, about $1.33 billion.

A stake, not a takeover

Both banks stressed that the investment is friendly. BPCE said it intends to be "a stable and long-term shareholder" and does not intend for its holding to exceed 9.9%. Its French-language announcement says it could later raise the stake to that level.

The board seat is not automatic. With Sabadell's support, BPCE will start talks with Spanish and European supervisors about appointing a director, and the appointment needs approval from the European Central Bank and the Bank of Spain, according to a BPCE presentation on the investment. Sabadell said the arrangement does not provide for a second BPCE director and does not involve Sabadell taking a stake in the unlisted French group, according to a wire report.

Nicolas Namias, BPCE's chief executive, said the investment is "fully in line with its Vision 2030 strategic plan" and "a further step in its ambition to develop and diversify its presence in Europe." Sabadell chairman Josep Oliu called it "a recognition of the strength of our standalone project."

Why a friendly holder matters to Sabadell

Sabadell spent 17 months fighting off its larger domestic rival. BBVA's hostile offer lapsed in October 2025 after holders of only 25.33% of Sabadell's shares accepted it, short of the 50% minimum BBVA had set and below the 30% level that would have allowed it to drop that condition, Spain's securities regulator said at the time.

Since then Sabadell has sold its British unit, TSB, to Santander and has been pursuing a standalone strategy. Analysts noted that it went into the BBVA fight with no significant core institutional shareholder apart from insurer Zurich. RTVE reported that Zurich holds about 5%.

Analysts read the new stake partly as a defense. "Obviously, this move removes possible situations such as the one experienced with BBVA," said Nuria Alvarez, an analyst at Madrid brokerage Renta 4. She added that the market would eventually see a merger of the two banks as the natural step, but only "in the very long term." Citi analysts wrote that "the arrival of a friendly strategic shareholder with board representation ambitions could nonetheless strengthen Sabadell's position in any future consolidation discussions."

Staying below 10% also means BPCE does not need prior approval from the Spanish government under the country's foreign-investment screening rules, El Español reported. The structure resembles recent moves at cooperative lender Cajamar, which has given 9.9% stakes to France's Crédit Agricole and Italy's Generali, the paper said.

What the two banks might do together

The banks plan to explore cooperation in corporate and investment banking, equipment leasing, consumer credit and business with clients that operate across borders. They expect to conclude those talks in early 2027 and said they would inform the market of any material development.

Those are areas where BPCE already has businesses. Natixis runs its corporate and investment banking and asset management, BPCE Equipment Solutions leases equipment, and Oney provides consumer credit. BPCE has worked in Spain for more than 30 years, with about 450 staff and more than €200 million of net banking income there, according to its presentation.

Sabadell's strength is lending to companies. It had about 11% of Spain's loans to small and midsize businesses and about 8% of the country's loans and deposits as of June, the presentation shows. For BPCE, the stake extends a European push that already includes Novo Banco, Portugal's fourth-largest bank, which it agreed last year to buy for €6.4 billion.

The two banks

Sabadell, founded in 1881, is Spain's fourth-largest bank, with €200 billion of assets, seven million customers, 1,116 branches and 13,850 employees. It reported attributable net profit of €971 million for the first half of 2026.

BPCE is a cooperative group built around the Banque Populaire and Caisse d'Epargne networks in France. It has 36 million clients and 110,000 employees, and describes itself as the fourth-largest banking group in the euro zone by shareholders' equity.

How the shares reacted

Sabadell opened at €3.65 in Madrid, about 2.8% above Monday's close. At 10:25 a.m. local time it was up 2.3%, ahead of a 1.2% gain for Spain's Ibex 35 index, according to the wire report. By 11:13 a.m. it was at €3.63, up 2.1%, giving the bank a market value of about €17.3 billion. The shares remain below their 52-week high of €3.77.