7 days ago
BBVA's Bid for Sabadell Delayed Amid Government Review
CC-Transcript
00:00Rodrigo, Spain's antitrust watchdog, had cleared the offer with some conditions. So I wonder how Madrid's justifying its own review. So they are saying it's about national interest and that gives them the right to look into this. Legally, they're allowed to do this, but they have certain restrictions and they can only comment beyond or on top of what the CMC, the watchdog, said. They cannot add new factors into their analysis. The other issue here is whether or not they can argue that this has to do with national security, not only national interest. That is a bit harder to imagine, but that is one issue that the other parties will be looking at, because BBVA says that legally they can only get involved in issues with national security. So you have two arguments. On one hand, they say it's national interest. On the other hand, you have BBVA saying the law only allows you to step in if you have issues of national security. So those are the two arguments that are being used right now to justify this. Okay. But if the government does set tough conditions on a takeover, how much could that limit what BBVA wants to do? Would it mean that the deal just isn't worth it in the end? So there are two kind of conditions they can set right now. On one hand, the one that's pretty clear is that the government has the ability to block the legal merger. What that means is BBVA could potentially end up buying a stake, even over 50% in SABADELL. But could it actually merge the banks? It could be just a shareholder, but not the actual owner. That's something the government can do legally. And obviously, then the question would be, is BBVA interested in being a shareholder in its competitor? Also, how does that affect competition? And that's one issue. BBVA has always said that they are interested and will stay here on the long run. The other way that this could play out is that the government sets tougher conditions, as you say, such as higher restrictions on the conditions they have to offer to clients, and that instead of doing these conditions like the competition regulator asked for three years or five, in some cases, the government says no, these conditions have to be one in ten for ten or 15. And that's when BBVA could potentially say, this is too much for me. The final thing is BBVA could also indicate that, okay, look, we will put money on the table. We will offer cash to the shareholders, and that suddenly changes the mood on this Sabadell site. That has not been floated yet, but it is a it's a trump card. Everybody's, you know, has expectations around.
