The Corps pointed out in October that, if it moved to Phase 2, the operation could be delayed until the first quarter of 2025.
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The National Markets and Competition Commission (CNMC) has finally decided to take the operation that BBVA wants to launch on Sabadell to phase 2, in such a way that it now enters a phase of in-depth analysis and may delay the schedule that BBVA managed. for the operation, as reported by the organization in a statement.
Competition bases its decision on a “potential impact” on the maintenance of effective competition in the financial sector, especially the area of banking and payment services. It points out that both banks operate simultaneously in the insurance production and distribution market, in the pension funds and plans market, and in the asset management market.
“In view of the circumstances of the operation and its potential impact on the maintenance of effective competition, the Competition Chamber has resolved, in application of article 57.2.c) of Law 15/2007, of July 3, on Defense of the Competition, deepen the analysis of the file in the second phase of the procedure”, adds Competition.
On the other hand, remember that the opening of the second phase “does not prejudge” the definitive conclusions that may be reached in relation to the concentration operation. It states that in the first phase a “detailed” investigation has been carried out on the competition situation in the affected markets, work that will result in “greater efficiency” in the analysis during the second phase, the purpose of which is to deepen the study of the operation.
Likewise, it indicates that both Banco Sabadell and other parties with legitimate interest may present allegations, as may BBVA, which may also provide more information.
Likewise, the CNMC indicates that it will request a mandatory report from the autonomous communities in which the concentration has a significant impact.
Finally, remember that its final resolution may be to authorize, accept commitments, impose conditions or prohibit the concentration operation.
‘PHASE 3’
In cases in which the resolution of the CNMC council is prohibition or subordination to commitments or conditions, the operation would pass to the Ministry of Economy which, in turn, could raise it within a period of 15 days to the Council of Ministers.
“The final agreement [del Consejo de Ministros]which may authorize the concentration with or without conditions, must be adopted within a maximum period of one month and may request a report from us,” says Competition on its website. In addition, the law indicates that the final agreement must be “duly motivated.”
Likewise, the Law on Defense of Competition contemplates that the Council of Ministers can evaluate economic concentrations “taking into account criteria of general interest”, other than the defense of competition, including factors such as national defense and security, the protection of public safety or health, the free circulation of goods and services within Spanish territory, the protection of the environment, the promotion of technological research and development, and guarantee of adequate maintenance of the objectives of sectoral regulation.
DEADLINES
If it had been approved now by the CNMC, the takeover bid would have followed the schedule set by BBVA, where a time of between six and eight months was estimated to achieve all authorizations to launch the takeover bid and close the merger in mid-2025.
However, with the move to the second phase, the operation may be longer. In fact, the Minister of Economy, Commerce and Business, Carlos Body, pointed out in mid-October that reaching phase 2 the calendar “can be extended several more months, well into the first quarter of 2025.”
In addition, it could generate a problem in the National Securities Market Commission (CNMV), in charge of analyzing and approving the prospectus for the takeover bid investors. The president of the supervisor, Rodrigo Buenaventura, has commented on several occasions that investors have two rights when it comes to a takeover bid: that it be launched as soon as possible or to have as much information as possible.
“We have a time problem versus the completeness of the information. We have to evaluate what these two objectives are, which one weighs more at each moment and monitor the process to decide when approval should occur once the project is completed. [o folleto] is complete,” he stated in mid-October in the Economy Commission of the Congress of Deputies.
On the other hand, this will also affect the evolution of the exchange, since, as already happened at the beginning of October, BBVA will have to modify the price to be paid to the shareholders of the takeover bid depending on the dividends given by both Sabadell and BBVA itself.
When Sabadell decides to distribute dividends, BBVA will have to adjust the exchange in shares, while if it is the bank chaired by Carlos Torres that remunerates its shareholders, the adjustment will be applied with an increase in the cash payment.
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