BBVA and Telefónica: Strengthening Ties Amid Market Shifts
Cross-Shares and Strategic Moves
In the dynamic landscape of the Spanish financial and telecommunications sectors, BBVA and Telefónica have made significant strides in reinforcing their cross-shareholdings. This move comes amidst a broader "teleopeda revolution" and the increasing influence of the State in both companies. BBVA now controls more than 4.9% of Telefónica’s shares, a figure that exceeds 5% when considering shares managed indirectly through investment funds. Conversely, Telefónica holds 0.77% of BBVA’s shares, marking a slight increase from 2023.
These small yet strategic gestures are aimed at strengthening the relationship between the two Ibex 35 companies. This is particularly noteworthy as BBVA is in the midst of a full-scale bid to acquire Sabadell, a move that has sparked rumors about potential departures. The cross-shareholdings also come at a time when BBVA is estimated to need to exceed 6% to retain a seat in the highest governing body, following the entry of SEPI and Saudi STC, and the increase to 9.99% of the package held by Criteria, the investment holding of La Caixa Foundation.
Financial vs. Strategic Participation
BBVA’s CEO, Onur Genç, has repeatedly clarified that the bank’s position in Telefónica is purely financial rather than strategic. This stance is reinforced by the fact that BBVA’s participation in Telefónica is counted as ‘available for sale’ to avoid greater capital consumption. The bank’s direct stake in Telefónica increased from 4.86% in 2023 to 4.93% in 2024, but this percentage does not confer voting rights. Official sources from BBVA attribute this increase to Telefónica’s share repurchase program in 2024, which amounted to 80.29 million titles.
Historical Vice Presidency and Current Dynamics
The historical ties between BBVA and Telefónica are further solidified by the roles of key individuals. José María Abril, representing BBVA in Telefónica, has been a vice president since 2007 and was last re-elected in April 2022. The recent changes in Telefónica’s governance have seen the creation of a new vice presidency for the SEPI counselor, while Abril and Isidro Fainé (representing Criteria) retain their positions. This reflects the ongoing evolution in the company’s leadership structure.
Financial Stability and Future Prospects
Telefónica’s price stabilization is crucial for BBVA to avoid potential accounting setbacks. BBVA’s president, Carlos Torres, expressed confidence that the changes in both capital and executive leadership will bring a breath of fresh air to the stock market. These changes could open a new phase for "dynamizing" the company’s value. Since 2018, an accounting change has allowed BBVA to load latent disabilities against heritage rather than results, mitigating the impact of potential financial setbacks.
Beyond Shareholdings: Collaborative Ventures
The relationship between BBVA and Telefónica extends beyond shareholdings. Telefónica recently secured a €600 million deposit from BBVA, highlighting their collaborative ventures. Additionally, both companies retain 44.44% of the joint venture Adquira Spain, specializing in Business-To-Business Electronic Commerce (B2B).
Table: Key Shareholding Information
| Shareholder | Percentage of Telefónica Shares | Percentage of BBVA Shares |
|---|---|---|
| SEPI | 10% | – |
| Criteria | 9.99% | – |
| STC | 9.97% | – |
| Blackrock | 4.29% | – |
| BBVA | 4.93% | – |
| Telefónica | – | 0.77% |
Did You Know?
BBVA’s strategic decision to maintain its Telefónica shares as ‘available for sale’ aligns with its long-term financial strategy to avoid significant capital consumption.
FAQ Section
Q: What is the significance of BBVA’s increased stake in Telefónica?
A: The increased stake, now exceeding 4.9%, strengthens the relationship between the two companies amidst market shifts and strategic moves.
Q: Why is Telefónica’s price stabilization important for BBVA?
A: Price stabilization helps BBVA avoid potential accounting setbacks, ensuring financial stability and a positive outlook for both companies.
Q: What is the nature of BBVA’s participation in Telefónica?
A: BBVA’s participation in Telefónica is purely financial, not strategic, and is counted as ‘available for sale’ to avoid greater capital consumption.
Pro Tips
- Monitor Market Trends: Stay updated on market trends and strategic moves by key players in the financial and telecommunications sectors.
- Analyze Shareholdings: Keep an eye on cross-shareholdings and their implications for corporate governance and financial stability.
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