The decision of the National Markets and Competition Commission (CNMC) with BBVA’s takeover bid for Sabadell differs from the procedure followed in other bank mergers. The organization approved the integration of Bankia into CaixaBank and Liberbank into Unicaja, the latest transactions and more comparable to the case, with limited and easily acceptable conditions for the entities involved.
The scenario was different as they took place in 2020when the uncertainties due to the pandemic and the banks’ already long journey through negative rates cast doubt on the capacity of entities to generate results and profitability.
It was then that Sabadell and BBVA negotiated a merger that was frustrated by the price, and it is something that the Basque group alleges in favor of the transaction while the Vallesan warns of a harmful impact for SMEs, unless guarantees are established to preserve the flow of its financing, such as segregating part of the business and selling it to a third party.
A situation like this could torpedo the takeover bid, since BBVA’s interest is, precisely, the attractive SME business in Sabadell. The Basque group is confident that, although the operation has entered a phase of detailed scrutiny, the CNMC will not set conditions or structural “remedies”, as it did not do in the other mergers.
The highest conditions were set by the organization for CaixaBankwhich by absorbing Bankia created a group with 664,027 million euros in assets, 23.4 million clients in Spain and Portugal and a workforce of 51,536 workers. On the one hand, it was forced to sell 9.4% of Bizum, 16.2% of Servired, 11.04% of Redsys and 3.9% of the Card and Payment System, but due to the established conditions by the bank itself in the statuses of the subsidiaries in terms of the position that each entity can have.
The CNMC required CaixaBank, above all, to provide conditions linked to the offer to clients. On the one hand, it had to maintain free use of ATMs for ING and Sabadell customers for a time, under the agreement that Bankia had with both entities directly or through Euro6000.
On the other hand, the agency detected risks to competition in 86 localities (postal codes) of the around 11,750 existing in Spain in the CaixaBank merger – in the Unicaja-Liberbank merger in just three municipalities of Cáceres -, where it demanded measures to avoid competition problems. CaixaBank committed to not abandon, except in an exceptional situation and with prior authorization from the CNMC, any town where there were only its own or Bankia offices to avoid problems of financial exclusion – a measure that affected 21 towns.
In the 65 municipalities identified, Bankia clients were also obliged to preserve the contractual conditions for three years and the free provision they had in some operations. In the event of changes in conditions, it also established a notice of between 30 and 60 days and that the offer of new products in those cases would not be under worse conditions for them.
In Unicaja-Liberbank, the bank committed to similar conditions in the three problem municipalities of Cáceres to ensure that the conditions of Liberbank clients there were not worsened.
BBVA commitments
To conduct the takeover bid on its territory, BBVA has guaranteed working capital financing to companies for twelve months, in a clear nod to SMEs and the self-employed. The Basque bank also secured an operational headquarters in Sant Cugat del Vallès (Barcelona) and the other in the BBVA Financial City in Madrid, in addition to the creation of a European hub for startups in Barcelona.
With respect to offices and employees, he promised that he will not leave any location where there is only one branch of his or Sabadell and that the adjustment in personnel will be negotiated, prioritizing voluntariness and limited compared to other mergers because both banks already reduced their templates. He also assured to maintain Sabadell’s SME business, the ultimate objective of the operation.
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