Body warns BBVA that "the Government has the last word" in the takeover bid for Sabadell

"The Government has the last word on the merger" between BBVA and Sabadell, after the former has presented a hostile takeover bid for the latter, the Minister of Economy, Commerce and Business, Carlos Body, warned this Thursday after the harsh statement issued by his Ministry against the operation. The Executive, he has advanced, could block the operation after listening to the supervisors.

This was defended by the Minister of Economy, Commerce and Business, during his speech at the V INTERNATIONAL EXPANSION FORUM, organized in collaboration with the international think tank The European House-Ambrosetti and which is being held this Wednesday and Thursday at the Parador de Alcalá de Henares.

The minister's statements came after the Ministry he heads issued a harsh statement frontally attacking BBVA's hostile takeover of Sabadell in both "substance and form" denouncing that it would have "potential harmful effects on the Spanish financial system." "due to its impact on banking concentration, territorial cohesion or employment.

"We have been very clear from the Government in rejecting BBVA's hostile takeover bid for Sabadell both in form and substance," explained Body, considering that it brings "an additional element of uncertainty in the market that impacts competition with elements harmful to the detriment of the entities' clients, in the financial inclusion agenda", as well as a positive impact "in terms of financial stability, territorial cohesion and potential employment costs".

Corps has ruled out that the Government has changed its mind but admits that the fact that the operation takes the form of a hostile takeover has raised its concern as it is an "additional escalation due to the forms, given the instrument with which the merger is intended to be achieved." ".

"From the beginning I have clearly expressed our concern about the impact of the operation in terms of competition, we are thinking that if this operation were carried out we would be in second place at the European level in terms of concentration of the financial sector. 70% would be in hands of three entities," Corps said.

"Let's look at the impact it could have, because the current banking concentration is already having an impact on the absence of remuneration for bank deposits," said the minister.

The minister has ruled out that there are political elements behind the Government's rejection, despite the electoral framework in Catalonia. "It is not only a question of Catalonia, but also the Valencian Community, due to these harmful effects without there being an electoral period in the Valencian Community," he illustrated.

From here, the minister explained, in the next month BBVA has to make official the presentation of the takeover bid before the CNMV, which must authorize it, which requires the approval of the European Central Bank, it must pre-notify it.

The next step is that the takeover bid will take place in parallel with the competition review that the CNMC will carry out, to which the operation will be conditioned. "If it has the go-ahead, the final decision to merge both entities will depend on the Government. It will be a process of months," Corporal has warned.

In reaction, the president of the employers' association, Antonio Garamendi, has asked the Executive to "respect private decisions" and let the companies act since it will be the shareholders who decide.