BBVA and Sabadell’s arguments to bring CNMC to their position in the takeover bid

The National Markets and Competition Commission (CNMC) is due to clarify this week – probably today – the main mystery of the public takeover offer (takeover offer) filed by BBVA for Sabadell. Its Competition Chamber is called upon to decide whether to authorize the operation or begin a more detailed and in-depth analysis, open to intervention by third parties in what is known as “Phase II,” which would delay the decision in time.

This body is composed of CNMC President Cani Fernandez and council members Maria Jesús Martin, Bernardo Lorenzo and Javier Ormaechea, whose decision the body will publish once it is adopted.

Although CNMC has calmly embarked on the process, the balance appears to be tipping towards a detailed examination of the possible risks associated with the deal, without compromising the fact that there are those within it who have decided to greenlight the takeover bid. accepting BBVA’s different obligations than other proponents of a completed risk investigation.

BBVA is at pains to convince that there is no reason to justify such close attention. reneging on various commitments in public online forums, many of which were made by CaixaBank at one time and to which others would add in confidential dialogue with the organization. The bank, headed by Carlos Torres, guaranteed, for example, working capital financing to companies for twelve months, a clear nod to small and medium-sized businesses and the self-employed.

It provides an operational headquarters in Sant Cugat del Valles (Barcelona) and another in the BBVA financial city of Madrid; creation of a European startup hub in Barcelona; guarantees that it will not leave the place where only one of its branches or branches in Sabadell will remain.; ensures that the staffing adjustment will be aligned with prioritizing voluntariness and restraint compared to other mergers, as both banks have already reduced their workforces in 2021 and are committed to supporting Sabadell’s SME business, which is the ultimate goal of the operation.

Sabadell defends moving to “Phase II” due to the complexity of the deal. According to some experts, this is a necessary step simply because of the difficulty of conducting adequate technical analysis when the transaction is hostile in nature – the data is not reconciled and there may be contradictory elements, which complicates the CNMC’s work as opposed to the consistent information provided in negotiated transactions.

In support of the Bank of Vallesano there is Government threatens to veto merger to sense risks and warnings that various business associations sent by letter directly to the organization’s president.

The business where quotas could be exceeded more clearly is POS terminals, but Sabadell is focusing on SMEs, a business that BBVA is aiming for and which, according to the Catalan enterprise, will suffer a decline simply due to the need for companies to look for other suppliers, which could potentially harm these supplies. In fact, Sabadell estimates that 40% of SMEs would face problems if the Catalan bank disappears and are focused on keeping this in mind. million-dollar business that was lost when Popular integrated into Santander in the SME and self-employed sectors.

The CNMC will have three months if it moves the analysis to “Phase II”, although it is not obliged to exhaust the deadline and could also extend it and even give the government a say at some point in the most extreme case. Most transactions that reach this stage face severe conditions,

without it being a rule to follow. It could move to “Phase II” to ensure stricter controls without imposing harsh “remedies” as BBVA advocates. Or, as Sabadell predicts, the business will need to be sold to SMEs, which would negate the takeover bid.