BlackRock, the American investment behemoth, holds significant stakes in two major Spanish banks—3.9% in Catalonia’s Banc Sabadell and 5.4% in the Basque-originated BBVA. Yet, despite its considerable influence, BlackRock appears to play no direct role in the potential merger discussions between these entities.
As one of the largest investment funds globally, BlackRock replicates stock market indexes through passive management strategies. Unlike other investors, it typically does not seek to appoint board members in the companies it invests in. This approach underscores its non-interventionist stance, focusing instead on broader investment trends rather than individual corporate governance.
Financial sources assert that BlackRock’s involvement in the BBVA’s recent attempt to acquire Sabadell has been negligible. Xavier Brun, a professor at the Barcelona School of Management (UPF), notes that BlackRock manages assets equivalent to 50% of the U.S. GDP, indicating the fund’s vast reach but limited interest in specific operational strategies at companies like Sabadell. Instead, BlackRock maintains stakes in major firms across various industries, including Santander, Inditex, and Cellnex.
In 2022 alone, BlackRock’s earnings from the four leading Spanish banks amounted to substantial figures: €109.7 million from Banco Santander, €157 million from BBVA, €55.8 million from CaixaBank, and €7.3 million from Sabadell. Despite these impressive numbers, BlackRock refrains from publicly evaluating its specific investments. A spokesperson for the fund, chaired by Larry Fink, stated they do not comment on individual companies or their strategic decisions.
Moreover, BBVA and Sabadell share 71 common shareholders who collectively own 31% of BBVA’s capital and 18% of Sabadell’s. Since the inception of the merger talks, the combined market value of Sabadell and BBVA has declined, an outcome undesirable to investment funds, suggesting that the market perceives higher profitability and dividends from the banks operating independently.
From a strategic perspective, maintaining competing entities within a portfolio can be beneficial. It allows for a balance in investment types based on risk profiles and for the recovery in one company of losses sustained by another within the same portfolio. Financial experts point out that BBVA’s shareholder base is inclined towards higher risk and returns, which explains the bank’s ventures into markets like Mexico and Turkey.
BlackRock’s strategy reflects a broader trend of major funds opting for a hands-off approach in the day-to-day operations of the companies they invest in, focusing instead on overarching investment strategies that align with long-term financial indices. This approach not only minimizes their direct influence on company decisions but also aligns with a philosophy of risk diversification and passive investment management.