Spain’s competition watchdog on Wednesday approved Spanish banking giant BBVA’s long-stalled hostile takeover bid for smaller rival Sabadell, bringing the potential creation of a new sector colossus closer.
The CNMC competition commission said the proposed transaction presented risks for retail banking, payment services and market competition but that BBVA had “submitted pledges that have allowed the authorisation of the operation”.
These include taking extra measures for clients deemed “vulnerable”, retaining a physical presence and commercial conditions in certain regions and maintaining credit lines to small and medium-sized businesses, said a CNMC statement.
BBVA, Spain’s second-biggest bank which has an important footprint in Latin America and Turkey, said its commitments “promote financial inclusion, territorial cohesion, and lending to SMEs and the self-employed”.
It also pledged to safeguard competition, “particularly in the regions where our presence will be most significant”, notably the wealthy northeastern region of Catalonia where Sabadell was founded.
BBVA’s bid in May 2024 came up against regulatory hurdles and opposition from Sabadell’s leadership, which is determined to maintain the independence of Spain’s fourth-biggest bank.
Sabadell questioned the methods used by the CNMC to analyse the impact of the merger on businesses.
The BBVA offer would deliver a “negative premium” of seven percent for Sabadell shareholders, “who will decide if the operation goes ahead”, it added in a statement.
The European Central Bank gave its green light in September, but BBVA still requires approval from the Spanish stock market regulator and the government.
The Socialist-led coalition has previously expressed competition concerns arising from the possible creation of a new bank behemoth.
The CNMC said Economy Minister Carlos Cuerpo would decide whether to raise the matter to the cabinet, which could assess the bid based on “criteria of general interest different from the defence of competition”.
Economy ministry sources said they would analyse the CNMC report “with rigour and detail” and proceed with the “utmost prudence”.
Agence France-Presse
