BBVA’s bid for Banco Sabadell is affected by a prolonged competition review

The CNMC (National Markets and Competition Commission), Spain’s independent regulatory body has told the banking giant BBVA that its takeover bid for Banco Sabadell would need to go through more thorough competency reviews. This has been another blow to the hostile takeover, whose value according to ‘The Financial Times’ amounts to around 11,000 million euros and which has already lasted several months. The acquisition is one of the largest in the European banking industry, and the resulting bank would likely be one of the largest in Spain.

The CNMC’s decision comes amid growing concern about the possible effects of this acquisition on fair competition in the banking market Spanish. Therefore, the offer will now have to go through phase two of the CNMC review. The regulator has also expressed concerns about how a possible merger could affect services such as insurance, banking, asset management and pension plans. He Spanish government has also been reluctant to offer support to this operation for anti-competitive reasons, although BBVA has already received the approval of the European Central Bank (ECB).

In May of this year, BBVA had initially offered 1 newly issued BBVA share for every 4.83 BBVA shares. Sabadell Bank. However, adjusting the dividend payment of BBVAit has now made a new offer to Sabadell, of 1 BBVA share for every 5.02 Banco Sabadell shares. In addition, a cash payment of 0.29 euros is also offered for every 5.02 shares of Banco Sabadell.

Banco Sabadell continues to oppose BBVA’s hostile takeover bid

Although the increase in regulatory requirements proposed by the CNMC could cause headaches for BBVA and a delay in the operation, this could be good news for Sabadell, which has always expressed its opposition to the takeover bid. Josep Oliu, president of Banco Sabadell, states in a statement published on the bank’s website: “It is clear that the merger of BBVA and Sabadell “It would have a negative impact on companies, especially SMEs, because it would make their access to credit and services difficult by producing a high degree of concentration.”

Sabadell has reiterated that it considers that BBVA’s offer is too lowand shareholders are also concerned that the BBVA shares on offer are less valuable, as well as more risky. He Antitrust regulator could also require BBVA to let go of smaller business clientsbut highly profitable, as part of a solution package, if this agreement is carried out. Another important concern is the impact that this acquisition will have on the banking market of Cataloniaas well as in its economy as a whole.

This is mainly because Sabadell Bank was born in Catalonia, an area that has a high number of branches of both the latter and BBVA. As such, a potential acquisition could mean the closure of several branches due to overlayswhich would cause job losses and economic tensions.