CNMC excludes BBVA roadmap in its takeover bid for Sabadell

The decision by the Competition Chamber of the National Markets and Competition Commission (CNMC) that BBVA’s takeover bid for Banco Sabadell moves to Phase 2, extending the time frame for its analysis, cancels the roadmap developed by BBVA for this operation.

The CNMC agreement is in line with the opposition that the Sánchez government has shown to this takeover proposal from the very beginning. The transition to the second stage was repeatedly mentioned by the Minister of Economy, Carlos Bodi, who throughout all these months did not deviate from his original position of rejecting the takeover offer.

The Competition Chamber that made the decision includes CNMC President Cani Fernandez and council members Bernardo Lorenzo, Maria Jesús Martín and Javier Ormaechea, all of whom are affiliated with the PSOE or its government partners such as the PNV.

The entry into the second phase changes the schedule planned by BBVA, which in terms of timing has been respected so far, and gives breathing space to Banco Sabadell, which has always viewed Phase 2 as the beginning of the end of the takeover bid.

The passage of time is ‘not good’ for BBVA

The passage of time is “not favorable” for the operation, the Basque bank’s chief financial officer, Maria Luisa Gomez-Bravo, admitted a few days ago. This is why the decision of the National Competition Market Commission (CNMC) regarding the takeover bid was so important for BBVA that it did not last longer than expected.

So far, the calendar has been favorable for BBVA, which was confident that the competition regulator would approve the takeover bid in Phase 1. This was confirmed in several public appearances by its president Carlos Torres and its CEO Onur Genk.

“CNMC has already made it clear that the same methodology will be used as in other cases, so we do not see that the operation has competition problems. Previous problems were resolved in the first phase,” Torres said.

In the same vein, its CEO Onur Genç, during the presentation of the bank’s quarterly results, confirmed that moving the operation to stage 2 was not its main scenario, and if it happened, it would lead to delays with “negative” consequences for the bank. shareholders.

At the time, he expected that the bank would have the option to back down if it moved into the second phase and Competition eventually imposed tough conditions.

What’s next for BBVA?

The panorama that is presented to the Basque bank from now on is not the most favorable, because in this new stage of the analysis of the operation the opinions of various participants will be taken into account, such as the competition of both entities, business associations, unions, consumers or the various interest groups affected by it . Moreover, most of them have already spoken out against the operation.

While the regulator has made it clear that the move to phase two does not prejudge the agency’s final conclusions on the final decision on the transaction, market sources note that with this decision, the chances of the takeover bid ultimately falling through increase.

In any case, BBVA will have to wait for the decision of the Competition before deciding whether to withdraw or continue the operation.

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