New scenario for BBVA’s takeover bid for Sabadell after Cnmc’s new decision

The fight between Bbva and Sabadell over the purchase offer that the former company put forward for the latter has entered a new stage following a decision by the National Markets and Competition Commission (Cnmc). to analyze in more depth the possible competitive consequences that the takeover of Sabadell by a bank of Basque origin could cause. This is a new stage, meaning that Sabadell won the battle, but not a decisive one.

What has changed from the previous situation is that now Sabadell and third parties who are concerned about the operation They can appear before the CNMC to present their opposing arguments, while Bbva can also present their opinion.

Cnmc has already completed the relevant portion of its work in just over five months since the acquisition operation was formally submitted to the relevant authorities. In the absence of Cnmc and Cnmv (the latter must still authorize Bbva to register the takeover prospectus), The remaining authorities did not express any objections to the attempted purchase.

Antitrust authorities have made progress in the study, but believe that they must give a voice to those who can be bought and who do not want this to happen in principle, analyze their arguments and, above all, to avoid this, in the event that the operation is finally approved, those responsible for the bank of Catalan origin can declare their helplessness and try to reverse the decision.

All this means that the commission’s experts will study what Sabadell points out and the reasons why others, such as trade unions, which will focus on possible staff reductions and respect for existing working conditions in the possible process of merging the two banks, whether this subsequent operation after the one currently being studied is finally allowed.

Organizations and communities

In addition, it is likely that various business organizations will also submit reports on the possible consequences. In fact, some of them already did this a long time ago, arguing largely against it, citing arguments such as that it could lead to the disappearance of the bank. (in fact, this is more than just a name, since most offices and employees would continue to exist and work in the same territory). Who misses CAM, Bankia or Popular years after they disappeared as part of Sabadell, CaixaBank or Santander?

At the same time, various autonomous communities, where possible negative consequences may be more significant, They must produce a mandatory report for CNMC examination.

In its communication announcing the move to the second stage, the Competition Chamber Cnmc noted the above and at the same time stated that it hopes that, despite this, the final decision (which may be positive, with or without conditions, or with an objection ) It can be adopted quickly and predictably before the expiration of the statutory three-month period.

She justified this possibility precisely by the work already done by her technical specialists based on her own methodology and based on information provided by the Bank of Spain and the experience of analyzing previous transactions.

An experience that led him to go down to the zip code level to discover possible limits to competition, after a global analysis of what is happening with the products and services provided, and what degree of dominance may arise.

All indications are that Sabadell will offer a different analysis, consistent with what it has argued in recent months about the impact the purchase could have on specific sectors (mainly SMEs). if one of the entities developing the greatest activity disappears.

In this sense, the bank notes that there are four large enterprises that provide services to SMEs nationally, and this number rises to five in some autonomous communities, where some banks from the old savings banks remain. and that these companies need to work with two or more organizations to ensure that they do not become overly dependent on the bank. In his opinion, their number will increase from four to three, which will reduce opportunities for SMEs.

It’s not the same But when competition authorities had to decide on possible transactions in the electricity or telecommunications sector, the lowest bar was set at three under the slogan “three is better than two.”