Zurich Insurance Group AG has increased its stake in Banco Sabadell SA, potentially strengthening its position in a key sales partnership as the Spanish lender faces a hostile takeover bid.
The Swiss insurer has raised its holding in Sabadell to nearly 4%, having first crossed the 3% notification threshold in October, according to data from the Spanish regulator CNMV. Zurich accelerated its purchases late last month and is now the bank’s second-largest investor, according to the CNMV website.
The investment comes as Sabadell seeks to resist a takeover bid from BBVA SA, its larger domestic rival. BBVA, formally known as Banco Bilbao Vizcaya Argentaria SA, operates a joint venture with Zurich’s competitor, Germany’s Allianz SE.
Zurich has a longstanding joint venture with Sabadell, through which the bank distributes Zurich’s insurance products. This partnership has been a significant source of sales, generating $643 million in insurance revenue last year, according to Zurich’s latest annual report.
Representatives for Zurich and Sabadell declined to comment.
BBVA’s offer requires regulatory approvals before being presented to Sabadell’s shareholders. The bank’s management has rejected the bid as undervaluing the company, while the Spanish government has raised concerns about market concentration.
Zurich’s current stake in Sabadell is valued at approximately €570 million ($618.3 million). Sabadell’s stock has risen about 45% so far this year, making it one of the strongest performers among major European banks.
Zurich Insurance reported that its business operating profit reached US$7.8 billion for 2024, up 5% from a year earlier. Meanwhile, net income attributable to shareholders rose 34% to US$5.8 billion.
The company also said its own exposure in the recent California wildfires, including Farmers Re, is estimated at US$200 million. However, despite these losses, the company’s strong capital base ensures its ability to manage such events.
Zurich has set ambitious financial targets through 2027, including core EPS growth exceeding 9% annually from 2025 to 2027, as well as core ROE of more than 23% by 2027.
“We continue to experience positive rate momentum in our commercial business and a healthy pricing environment in retail, positioning us strongly at the start of the new cycle for which we have already set our most ambitious targets yet,” said CEO Mario Greco.
