BBVA is confident that the analysis by the National Markets and Competition Commission (CNMC) of the takeover bid they have underway for Banco Sabadell can be resolved satisfactorily in a few months. But in the event that the conditions imposed by the institution, which has just extended its examination to phase two, are too harsh and demanding that they squander the “creation of potential value”, the entity reserves the option of not continuing with the operation.
“We have the option of backing out of the takeover bid,” said BBVA CEO Onur Genç, in the 31st Financial Sector Meeting organized by ABC and Deloittein reference to the fact that if the so-called ‘remedies’ eliminate this value creation, there is always a way out. This is possible since the operation includes this possibility from when the takeover bid was launched and it is, together with the Government’s position, the main obstacle to overcome in this operation.
That, however, is not the scenario that the Basque entity handles in its operation on Sabadell. “Our conviction is that we expect the operation to be approved in a few months, maintaining the potential value creation of the transaction,” said the manager. They are in permanent contact and collaborating with both the CNMC as with other institutions to carry out the operation as soon as possible, he indicated.
«Our position has been very clear. “We believe in the value that the operation creates for shareholders and society in general,” Genç elaborated, while emphasizing that banking needs larger players, with greater investment capacity, especially in Europe. The CEO of BBVA has indicated that “The economic rationale for the takeover bid is undeniable” and that gaining size allows banks to be more efficient, more profitable and have greater investment capabilities.
Despite everything, the fact that Competition has decided to extend its analysis to phase two complicates things in a certain way for the Basque bank. Firstly, because it greatly extends the deadlines that had been initially set; and secondly, because a hearing will now be given in the process to third parties unrelated to the operation but who wish to intervene. In this last case, the CNMC will have the opinion of Sabadell itself, of autonomous communities such as Catalonia, of employers… and of the Government of Pedro Sánchez, which has openly shown its opposition.
Beyond the takeover, Genç has highlighted that they are focused on the business in all their geographies and has indicated its confidence in the financial objectives that have been set, especially mentioning profitability. Likewise, he has said that his franchise in Mexico “is unique”; In fact, it usually contributes more than half of the bank’s overall profit.
Asked about the need to create European champions, the CEO of BBVA stressed that in the Old Continent there is a lack of large European banks. “Europe needs to grow, it needs investments and we can convince that it is good for societies to create larger banks,” he concluded.
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