The public takeover offer (tender offer) of BBVA about Bank Sabadell removes another regulatory hurdle. THE European Commission decided not raise any objections after excluding that the operation is based on foreign subsidies likely to distort the single market. The deadline available to Brussels to launch an in-depth investigation into this matter expires this Tuesday, November 26.
It was BBVA itself which notified the operation in Brussels on October 21, because this is what the recent Community regulations on foreign subsidies. The rule, which took effect in July 2023, requires companies must inform the Commission mergers and acquisitions where one of the parties involved has a turnover in the EU of at least €500 million and there is a foreign financial contribution of at least 50 million euros.
Once BBVA’s communication was received, the Community Executive had 25 business days to review the information and initiate a comprehensive review. As there has been no movement from Brussels, This means that BBVA can continue its tender offer from the point of view of the new foreign subsidy regulations.
According to this regulation, if the Commission detects the existence of a foreign subsidy distorting competition, it must carry out a balancing test whose objective is to assess the positive and negative effects of extra-Community aid.
If the negative effects outweigh the positive effects, Brussels is empowered to impose corrective measures, both structural and non-structural, as well as reimbursement of the foreign subsidy.
It can also accept commitments from the companies concerned to correct the distortion caused by the foreign subsidy. In the most extreme case, The Community executive has the power to prohibit subsidized concentrations.
After the green light from Brussels, BBVA’s public purchase offer for Sabadell is still awaiting approval from the CNMCwhich is in this case the authority responsible for examining its impact on competition in the banking market, since the concentration does not reach the thresholds which would have determined its examination by the European Commission.
THE National Markets and Competition Commission decided on November 12 to carry out its analysis of the impact on competition that it could have a hypothetical integration of BBVA and Sabadell has phase 2which means that the authority will carry out a more in-depth study of the matter. In practice, this means that The terms of the operation will be extended for at least three additional months.
