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Spain’s BBVA Faces Lengthy Antitrust Review in Hostile Sabadell Takeover Bid

By  |  October 14, 2024

In a recent update on the contentious takeover bid by BBVA for Sabadell, Spanish Economy Minister Carlos Cuerpo indicated that the review process could extend into the first quarter of 2025 if the competition authorities opt for a more thorough investigation. This announcement comes as BBVA’s €12 billion ($13.4 billion) bid, initiated in April and turned hostile in May, continues to face significant scrutiny, particularly from the Spanish government and competition regulators.

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    Cuerpo’s comments, made during an interview with TV3, Spain’s Catalan regional TV station, highlight the potential for a prolonged review process. He noted that if the National Commission on Markets and Competition (CNMC) decides to move the case to phase 2 of its evaluation, the timeline for approval could stretch considerably. “We are talking about a scenario that may last several more months,” he stated, emphasizing the complexities involved in the regulatory assessment.

    The bid has already received a green light from the European Central Bank as of September 5. However, it remains contingent upon approval from Spain’s stock market supervisor, the CNMV. Under existing Spanish law, while the government cannot outright block the takeover, it retains the authority to intervene in the merger approval process, particularly if it involves significant concerns regarding competition.

    Currently, the CNMC is conducting a phase 1 review, which typically lasts about a month. However, if the case escalates to phase 2, the review could extend to three months or longer, as additional information and assessments are required. In such a scenario, the CNMC would implement conditions aimed at safeguarding consumer interests by ensuring adequate market competition. “In case this goes to phase 2, the CNMC sets a series of conditions to ensure there is sufficient competition as not to harm consumers,” Cuerpo explained, reinforcing the government’s cautious stance.

    Related: Financial Regulator to Monitor CNMC’s Ruling on BBVA-Sabadell Acquisition

    This week, BBVA’s CEO, Onur Genç, expressed optimism about the bid’s review process, suggesting that he anticipated minimal remedies in phase 1, describing the situation as a “textbook” or “ideal transaction” without foreseeable competition issues. However, the government’s resistance to the bid remains a significant hurdle. Cuerpo reiterated this opposition on Friday, voicing concerns about the potential negative impact on competition for consumers.

    In May, BBVA had projected that the approval process would take approximately six months before reaching Sabadell shareholders, with an anticipated take-up period of no more than 70 days.

    Source: Reuters