The OPA to Sabadell faces its definitive phase in the coming weeks after months of delay. The agency decided in November to submit the transaction to a deeper analysis, in the second phase, after the commitments raised by BBVA insufficient. The bank chaired by Carlos Torres He proposed to maintain the commercial conditions in the 69 postal codes in which the resulting entity was in monopoly and keep the offices where it will stay alone or with a competitor after the merger, as well as keep the lines of circulating to SMEs for 18 months or apply average national prices for access to credit.
However, since then the situation took a Copernican turn. Although at that time he knocked them down because he appreciated competition problems in credit to SMEs and in paying business, he is now about to achieve a commitment on those same points. The presiding agency Cani Fernández He has ruled out one by one all the proposals suggested by the Sabadell’s legal team, a supporter of using the method that applied the EU to the fusion of TSB -filial of Sabadell- or Lloyd instead of the analysis by postal districts.
The CNMC also rejected the character of 79 organizations, between business associations, unions or cameras of commerce. Given this position, Foment del Treball presented an appeal before the National Court, which was admitted to processing and the resolution on precautionary measures, which would paralyze the process is pending. Cepyme or the Confederation of Entrepreneurs of Galicia joined the claim.
External competition consultations will be only circumscribed to market tests, as already done in phase I, between traditional banking operators, Neobancos, Fintechs, against the Sabadell criteria. In them no relevant conclusions were drawn, so now this step is not expected to affect a lot.
Everything indicates that the CNMC and the BBVA will reach a pact. Torres rejects the sale of business units, requesting Sabadell. Its proposal will be more to expand the deadlines and apply average prices throughout Spain to the credits of the areas where it has a greater presence of Catalonia and the Valencian Community.
Then the competence will raise its report to the Plenary, which will predictably make its decision in the first half of April. This has three options: prohibit the operation, which is ruled out; Put it conditions or accept it with the commitments agreed with the BBVA, the most likely. From there, the process is held by the Ministry of Economy, which has fifteen days to see if it elevates it to the Council of Ministers. The Government will therefore have the last word, they recognize in the bank.
All eyes at this point turn on the head of Economics, Carlos bodywhich will have in your hand the ability to lie or approve the merger, as the Cesares did with the ator defeated in the Roman Coliseum. The thumb back or face down determined his future.
But here another controversial point opens. Article 10 of the Competition Defense Law grants the Government the ability to assess concentrations according to criteria of “general interest” other than the defense of the competence.
With the law in hand, the aspects that the Government could take into account to hinder the operation would be those related to national defense and security, public health, free circulation of goods and services in the national territory, environmental protection, promotion of R&D and guarantee of an adequate regulation framework.
However, objections placed from the Executive have focused on issues not collected in the standard, such as territorial cohesion, maintenance of employment or financial inclusion, in reference to the possible reduction of templates and their impact on customers, especially the most vulnerable, as people over 65 years old or with disabilities.
The BBVA discards in advance the decision and ensures that they will comply with it “whatever it is.” “We are not planned to get into judicial demands,” they say. And less against the government, it could be added “if the conditions are assumed, we will continue and if not, we will give up the merger,” they say concisely.
“What do you think Blackrock is going to tell me if the offer goes against the market?” Says Carlos Torres
“Now they say that the important thing is social welfare. I cannot assume political conditions. I have to ask my shareholders, to be guided by the market criteria. What do you think Blackrock is going to tell me – it is the main shareholder of both BBVA and Sabadell – if I ask you electionomista.eson the eve of the general meeting of your entity and a few days that the CNMC is pronounced.
If the CNMC and BBVA reach an agreement on the commitments to approve the operation, the government must respect those commitments and focus on the common interest, as the president of Sabadell requested, Josep Oliuat the General Meeting held on Thursday. Oliu demanded, therefore, that the government’s allegations are known by the shareholders before voting for the exchange of the merger.
There is a moral risk problem if the government puts disproportionate or political conditions to knock down the OPA after obtaining free way in the CNMC, some experts warn. These point out that such a decision would be interpreted as contrary to the market and damage Spain’s reputation before foreign investors.
To prevent the latter from happening, the executive saves one last cartridge. The rejection of the Sabadell’s requirements to the CNMC has generated discrepancies among some advisers of the agency, who would be willing to cast private votes against the competition resolution, provided that it comes out with soft “commitments”, as expected.
In this way, the Government could rely on these votes so that its decision affects the excessive concentration of autonomies such as Catalonia or the Valencian Community, such as Sabadell, together with other more political criteria, such as social inclusion or maintenance of employment,
The Government seeks to rely on several particular votes against the resolution issued by the CNMC
The names of the directors who could cast particular votes are unknown, but everything points to the vocal next to Junts, Pere Soler. Next sources indicate that, at least, two vowels have expressed their dissent with the criteria used.
Another aspect that the government’s opinion could mark is the bank’s headquarters. The president of the Generalitat, Salvador Illathis Thursday made a presentation of his plans for the Legislature, in which he stressed the importance of the return of the Sabadell, Molins or La Caixa Foundation to Barcelona and “of many others that will return,” he said.
Illa expressed shortly thereafter. “It is not for us to decide to us and we will be respectful of the decision made,” he said.
A few hours before Sabadell’s CEO, César González-Bueno He pointed out that the scenario on which the BBVA works is to buy a part of the Catalan bank, without melting the two entities, which would allow the headquarters to be maintained in San Cugat. An end that neither confirms nor denies towers.
The operation is conditioned, after the last changes, to the acceptance of 49% of the shareholders. 40% of that capital are funds, which would be favorable to accept it, and the remaining 10% could be covered with small Mexican shareholders and investors such as David MartínezMinister of Sabadell, who refrained from voting against the OPA.
Another key element is if BBVA improves the amount to be paid for Sabadell, since at the moment the price of the Catalan bank exceeds in more than 4% the OPA exchange equation. But it will be the government that decantes the decision of whether the merger goes ahead. And so far there are no indications that I will change your mind, on the contrary. Carlos Torres will not be able to keep the Sabadell in harmful conditions for the market, even as a participated bank.
P.S..-The other battle that is coming is the hurry control. The Board will determine whether the president, Joseph Oughourliankeep the control of the owner group of The country and of the Be. Vivendi’s position is key. The bad thing is that the pressures exerted on the French group to refrain or vote against Oughourlian compromise the reputation of several high positions.
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