The BBVA asks the ECB for the last authorization it needed to launch the takeover bid for Sabadell

BBVA has taken another step to launch its takeover bid for Sabadell. The bank led by Carlos Torres Vila has requested the European Central Bank (ECB) for authorization to take over the Catalan entity and later merge both. In this way, BBVA has already submitted all authorization requests to the institutions that must approve the takeover bid: in addition to the ECB and the National Securities Market Commission (CNMV), to the National Markets and Competition Commission (CNMC ), to which he raised it last Friday.

The ECB has to express its non-opposition to the operation for it to go ahead. The supervisor’s main task is to ensure the stability of the financial system, so his analysis will be based on prudential criteria and how the union of both banks will affect solvency. According to the president of BBVA himself, the ECB is not expected to create obstacles. “In the first interactions with the supervisors there is no obstacle from their point of view, they even have a favorable opinion of consolidation with the consideration that the entities acquire scale,” declared the banker at the press conference to explain the takeover bid. . The ECB could rule within a period of between 15 and 70 days.

Two weeks ago, the bank already submitted the request for authorization and admission for processing of the operation brochure to the CNMV. Once approval has been received from the ECB and the stock market supervisor, BBVA could open the takeover acceptance period. However, the takeover bid is subject to at least 50.01% of Sabadell shareholders accepting the share exchange proposed by the bank (it offers one BBVA share for every 4.83 Sabadell shares, which at current prices represents a premium of 7%). Likewise, BBVA has already called an extraordinary meeting for July 5 in which its investors must approve a capital increase to issue the new shares that will be delivered to Sabadell shareholders.

Last Friday, BBVA also presented the authorization to the CNMC, which will be a key body in the operation. The financial sources consulted do not expect Competition to deny the merger, but it could delay it more than BBVA expects. The concentration analysis is made up of two phases. In a first phase, which lasts around a month (not counting the pauses that may occur to require more information), the operation is analyzed and it is decided whether it should be archived, if it is susceptible to being authorized or, if the concentration requires be analyzed in more detail due to the competition problems that it may generate.

The last two banking mergers (that of CaixaBank and Bankia and that of Unicaja and Liberbank) were closed in the first phase and took around four months. But, in the event that the CNMC’s analysis requires greater detail, it would lead to the second phase of the procedure, where the participation of interested third parties is contemplated, and it can be extended for another three months without including possible pauses to request more information. In total, it could last a year. It also remains to be seen the conditions imposed by the competition body to accept the operation, since the concentration in some regions (especially Catalonia and the Valencian Community) will be very high and also in the business of small and medium-sized companies. Financial sources explain that it could even force them to get rid of a part of the business.

Ultimately, after the Competition exam, BBVA would need approval from the Government to merge both entities. The Government, which has publicly expressed its rejection of this operation, will have the last word, but if it rejects it, it must justify its decision.

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