linked to Sanchez and his government partners

BBVA’s takeover bid for Banco Sabadell will be in the hands of seven directors of the Commission for Markets and Competition (CNMC) linked to Pedro Sánchez or his partners in the executive branch.

It is taken for granted in the market that European Central Bank (ECB) will not create any obstacles to work and that National Securities Market Commission (CNMV) will follow the same path as the institution chaired by Christine Lagarde.

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As far as solvency is concerned, and this is the area of ​​activity of the ECB, there will be no problems with the united organization. It is true that the impact on BBVA’s capital will be greater than the Basque bank predicts, but nothing will prevent the European issuer from favoring the consolidation of the Spanish market, which some of its members have publicly advocated.

The CNMV is also not expected to prohibit a takeover bid for Banco Sabadell if the terms of the prospectus comply with the law.

Thus, it is the CNMC that will give the green light to a takeover proposal, impose conditions it deems necessary, or directly veto it if it foresees that there may be restrictions on free competition.

Theoretical independence of CNMC

In theory, the CNMC is a body independent from the government, but in practice, the body’s board is subject to party quotas, in this case those of Chief Sánchez and his partners in the ERC and PNV.

The current president of the CNMC, Kani Fernandezwas appointed to this position in June 2020, at the height of the pandemic and in one of the first decisions of the coalition between PSOE and Unidas Podemos.

It is true that Fernandez has earned a reputation for independence, but it is equally true that she was an adviser to the Presidential Ministry between March and June 2020 under the influence of Ivan Redondo, then Pedro Sánchez’s guru.

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With the help of Fernandez, he reached the Council Secretariat in September 2023. Miguel Bordiu Garcia-Ovies, after serving as head of the legal council of CNMC. As the Bank of England clarified, his position is appointed freely, that is, at the discretion of Fernandez. And although he does not have voting rights, he influences the regulator’s decisions.

“Sunchesfera” colonizes the council of the competition regulator

As for the rest of the CNMC board, they are all affiliated with PSOE or its government partners. This is the case Bernardo Lorenzopresident at the proposal of the PSOE of the Telecommunications Market Commission (CMT) until 2013, when he was removed from office by chief executive Mariano Rajoy.

CMT’s departure also reached Xavier Ormaecheaformer parliamentarian for the PNV, but both he and Lorenzo appealed the dismissal to the Supreme Court and were appointed directors of CNMC by execution of a positive decision of January 19, 2017, receiving the corresponding salaries from the dismissal plus interest.

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Also on the CNMC board are Pilar Sanchez and Maria Jesus Martin. As for Sánchez, the PSOE elected her to this position in 2021 after she held various positions of public responsibility, including vice-president of the National Competition Commission in April 2010 under the socialist government of José Luis Rodríguez Zapatero.

Relatively Maria Jesus Martin, is an expert in energy regulation and competition law, similar to Third Vice-President of the Government and Minister of Ecological Transition and Demographic Issues Teresa Ribera. In fact, Martin served as a member of the CNMC board after the departure of Mariano Bacigalupo, Ribera’s husband, from the CNMV.

In addition, the CNMC board includes Carlos Aguilar, who joined the organization on behalf of Unidas Podemos and the University of Barcelona. This expert admitted he was not a “competition expert” after being appointed to a “larger panel.”

Also on the CNMC board is Josep Maria Salas Pratto comply with the quota corresponding to the Esquerra Republicana (ERC).

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However, there is no councilor from the Popular Party because the government did not count on the party, then led by Pablo Casado, to renew the CNMC in 2020.

Importance of the CNMC solution for Banco Sabadell

Given this list of directors, the CNMC’s decision will be critical to the approval of Banco Sabadell’s takeover bid. To do this, you will have to analyze whether the combined entity poses a competitive threat.

As she explained herself Kani Fernandez Last week in Santander, banning a takeover bid for Banco Sabadell would be an “exceptional” measure to the extent that the entity can impose conditions or enter into obligations.

In particular, the CNMC may authorize the operation, archive it, authorize it with obligations, authorize it with conditions, or prohibit it outright. In the last three cases, the regulator must transmit the decision to the Ministry of Economy, which, in turn, for “reasons of general interest”, may submit it to the Council of Ministers within 15 days.

This is where Economy Minister Carlos Bodi comes into play, recalling a few days ago that the assessment of the hostile takeover of Banco Sabadell “has not changed,” thereby reaffirming the abandonment of the operation.

The government can cite reasons of general interest to oppose the merger of Banco Sabadell and BBVA, but the decision must be “reasoned.” The excuse is the lack of remuneration on deposits, an issue on which the CNMC has not yet published a report.

Realizing that these channels of communication between the government and CNMC could eventually stifle the operation, the Basque bank changed its strategy, choosing the path of flattering the economic policies of the executive branch.

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