The National Commission for Markets and Competition (CNMC) complicated this Tuesday the public offer to purchase shares (OPA) of the company BBVA in Sabadell by extending the analysis of the impact of a possible merger and opening the door to the government and other interested parties to give their opinion.
According to close sources, the CNMC decided that it was not enough to study the operation in the first phase, as it usually does in most cases, as happened during the merger of CaixaBank and Bankia, but on this occasion we must move on to a second phase study that It will be extended until 2025.
The Competition decision, a priori, complicates BBVA’s public purchase offer for Sabadell and cin accordance with the wishes of the Catalan entitywho has always insisted on the opportunity to go further in the analysis of the CNMC and to include a second phase.
The CEO of the entity, César González-Bueno, highlighted in an interview with EFE that there has been “an unprecedented level of agreement” in which unions, businessmen, autonomous communities and “the entire political spectrum” considered that this operation posed competition problems.
For BBVA, however, this means a bucket of cold water, as its CEO, Onur Genç, has repeatedly said that he sees “no problem” with competition and hopes that the CNMC will give the green light to the operation in the first phase. with the “precedent” of CaixaBank and Bankia, which created a larger group.
But by entering a second phase of study of the operation, the CNMC opens the door to listening to other parties, such as consumers or business associations, to determine whether it opposes the hypothetical merger of BBVA and Sabadell or imposes conditions that guarantee competition in the sector. walk.
Government involvement
With the entry into force of the Competition Act 2007, government intervention in controlling mergers has been significantly limited. The authorization of operations belongs exclusively to the CNMC and only if a certain operation is prohibited or if it is subject to commitments or conditions during the second phase, the Ministry of the Economy could submit it to the Council of Ministers.
This is where the Executive, which from the start opposed a possible mergercould impose its own conditions, but never for competitive criteria, but rather for other reasons, for example reasons of general interest.
Alongside all this, the BBVA offer to Sabadell shareholders Approval from the National Securities Markets Commission (CNMV) is still pending, which is essential to approve the buyout prospectus and allow the bank to move forward with its plans.
After the failure of a second merger attempt, BBVA launched an offer to Sabadell shareholders in early May, to which offers a payment of 0.29 euros in cash and deliver one new share for each 5.019 of Sabadell, taking into account the dividends paid by both entities in October.
And in the event that the public purchase offer is successful, because more than 50% of Sabadell shareholders decide to sell their shares to BBVA, which would allow BBVA to take control of the Catalan entity, the merger with the BBVA group would remain pending.
BBVA Options
At the end of October, BBVA admits the possibility of reconsidering its projects take over Banco Sabadell if it concludes that the conditions that the CNMC ends up setting are “unaffordable“, as the CEO explained during the results press conference.
If Concurrence decides to extend its analysis, Genç advances, BBVA would respect this decision but he would continue with his plans, even if they took longer.
At the bank, we are convinced that the Sabadell purchase proposal is good “for everyone” – for the economy, the shareholders of both entities, customers and employees – and Genç ruled out that he and the president Carlos Torres should consider resigning if in the end the operation ends up blowing up.
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