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Introduction
Alicante, 2 January 2012 Miquel Montes, Federico Rodriguez, and Carles Abarca landed in Alicante on January 2nd, 2012, after the acquisition of BCAM (Banco Caja de Ahorros del Mediterráneo) by Banco Sabadell (BS) for the symbolic price of one euro. Montes was appointed the new CEO of the acquired bank. His previous post was as chief of operations and technology, a position to which his right hand, Federico Rodriguez, was now appointed as chief technology and operations officer (CTO). Carles Abarca was appointed as chief information officer (CIO) of the group. They were responsible for the integration of the new bank.
One month earlier, during the press conference held on 8 December 2011 to announce the award of BCAM to Banco Sabadell after a competitive bidding process, Josep Oliu, Chairman of Banco Sabadell, stressed the strategic importance of this acquisition. He went on to state his bank's intention to put an end to BCAM's recent period of instability and uncertainty following its nationalization by the Banco de España (the Spanish regulator) a few months earlier as a consequence of the financial crisis in Spain (see Figure 1 - See PDF,). Oliu had stressed that the merger would generate EUR331 million in synergies from 2012 to 2014.
In fact, Banco Sabadell had grown through the mergers and acquisitions (M&A) of seven banks in Spain and four in the United States from 2003 to 2011, leveraging its core banking platform (PROTEO) and IT-based competencies, replacing all IT infrastructures and systems of acquired banks with PROTEO. As a result of this operation, Banco Sabadell would account for EUR166.5 billion in assets, becoming one of the elite 'systemic' banks in Spain, essential to Spain's economic infrastructure. For that reason, Oliu had announced that BCAM must be integrated before the end of 2012.
Some analysts attending that press conference were sceptical about this acquisition.1 In the first place, Banco Sabadell and BCAM were very similar in size (some 2.5 million customers). Second, BCAM had a brand new core system whose replacement was going to be very complex in only 1 year. Third, analysts considered that Banco Sabadell had underestimated the risks involved in such a large acquisition, especially considering that BCAM's risk portfolio was estimated at EUR24...