Sabadell's Board of Directors Set to Approve Relocation of Headquarters Back to Catalonia

The Banco Sabadell is on the verge of making a significant decision regarding the relocation of its headquarters back to Catalonia. The bank has notified the National Securities Market Commission (CNMV) about a board meeting scheduled for Wednesday, where it is expected to approve the move back to its original location in Sabadell. This decision comes seven years after the bank transferred its headquarters to Alicante during heightened tensions surrounding Catalonia's independence movement, specifically following the controversial referendum held on October 1, 2017.

Currently, the political climate surrounding Catalonia has stabilized, which may have influenced this potential shift. Additionally, the decision arrives amid a hostile takeover bid from BBVA, which is attempting to acquire the Catalan bank despite its resistance. Initial market reactions have been cautiously optimistic, with Sabadell's shares increasing by approximately 0.2% at the start of the trading day, while BBVA's stock has experienced slight declines.

Sabadell has confirmed to the CNMV that its plans include re-establishing its corporate headquarters at Plaça de San Roc, 20, in Sabadell rather than in Sant Cugat del Vallès, where its operational headquarters is currently located. The upcoming board meeting will take place late Wednesday morning. Since the relocation to Alicante, which occurred after acquiring the Caja de Ahorros del Mediterráneo (CAM) in 2011 amidst a financial crisis, the Valencian Community has become the bank's second-largest market following Catalonia.

Banco Sabadell was among the over 3,000 businesses that relocated outside of Catalonia following the 2017 referendum, joining other significant companies like CaixaBank and Naturgy. Notably, Grifols was one of the few major firms within the IBEX 35 index that chose to remain in Catalonia. The potential return of Sabadell marks a noteworthy event, following the reestablishment of headquarters for companies like Aguas de Barcelona, Red Points, Laboratorios Ordesa, and Cementos Molins over the past few years.

The political implications of businesses relocating their headquarters to Catalonia align with the interests of the current Catalonian government, led by Socialist Salvador Illa, as well as the previous administration under Pere Aragonés from ERC. This situation has also been a topic of negotiation between the Junts political party and the Spanish Socialist Workers' Party (PSOE).

Strategically, this move appears to be a response to the ongoing hostile takeover attempt by BBVA. Should the takeover succeed, it could lead to another relocation of the headquarters outside of Catalonia. While BBVA's official headquarters is in Bilbao, its actual decision-making center has shifted to its Madrid office located in the Las Tablas neighborhood.

This situation places BBVA's plans within a politically charged context, despite the bank's focus on the financial aspects of the acquisition. Over recent months, BBVA's president, Carlos Torres, has engaged with key figures in Catalonia's business and financial sectors to position the bank as an entity equally representative of Catalonia as it is of its home region in the Basque Country or Madrid.

The proposed takeover has met resistance from various political parties and business organizations, as it is perceived as a threat to Catalonia's economic significance. Concerns have also been raised about diminished competition in the region, particularly as the National Commission on Markets and Competition (CNMC) has warned about the high concentration of power that the merger would create, potentially impacting access to credit for small and medium enterprises crucial to Catalonia's industrial landscape.

As a result, the CNMC is subjecting the takeover to a more rigorous review process. The Catalonian Competition Authority has expressed strong opposition to the transaction. While a definitive ruling is expected in March, it may not outright reject the takeover, but could impose conditions that could alter the feasibility of the acquisition for BBVA. The preservation of the bank's Catalan identity is likely to be a significant point of consideration in these discussions.