The Government Continues to Reject BBVA's Takeover Bid for Sabadell

The Minister of Economy, Trade, and Business, Carlos Cuerpo, stated this Wednesday that there is no new evaluation element on the table that has made him change his opinion to oppose the public offer of acquisition of shares (OPA) launched by BBVA over Banco Sabadell and its subsequent merger.

"We are, of course, awaiting the process, where we are very respectful of the intervention of all the institutions that have to participate, including not only the National Securities Market Commission (CNMV) but also the National Commission of Markets and Competition (CNMC), and we are waiting for additional information. Without that new information, we are exactly at the same point," emphasized the minister in statements to Onda Cero collected by Europa Press.

Cuerpo indicated that when these bodies pronounce, the Government will make its assessment, but from its perspective, as each institution "has to see it from its angle."

"Each institution has to see it from its prism. The European Central Bank, from the angle of financial stability, the CNMC from the specific angle of competition. We have a horizontal vision, which is none other than the common interest or the interest of citizens," he remarked.

Cuerpo insisted that the Government is clear that this operation poses "a danger" due to excessive market concentration and, in light of this concern, has expressed opposition to it.

"The European Central Bank has a specific competence in terms of financial stability or system stability that has nothing to do with the concern I just pointed out, which relates to competition, excessive concentration situation and the impact that this may have on customers or elements of financial inclusion, among others," he added.

Asked whether competition rules should be relaxed as suggested by the 'Draghi report', Cuerpo referred to the importance of the concept of "relevant market" when assessing this issue.

"If we advance in European market integration and the relevant market for the financial system is truly the European market, obviously the impact on competition of a merger between BBVA and Sabadell will not be the same as if the relevant market is simply the domestic market, the Spanish market. When we talk about advancing in the single market, this is what allows these companies to acquire scale and large size without substantially negatively affecting competition," he stated.

The minister added that this is an additional European dimension point included in the 'Draghi report' and will also be one of Teresa Ribera's competences as Executive Vice President for Clean, Fair and Competitive Transition in the European Commission and Commissioner for Competition.

BBVA updated last Friday its US prospectus for the OPA over Banco Sabadell to include the continuous rejection expressed by the Minister of Economy towards the operation.

Specifically, BBVA notes in the document that Cuerpo expressed his opposition to the OPA and BBVA's merger with Banco Sabadell on May 10th, a day after making the proposal public. Since then, he has maintained this rejection whenever asked publicly about it.

In any case, the bank warns that this stance by the minister occurs before knowing reports from the European Central Bank (ECB), CNMV, Directorate General for Insurance or from money laundering prevention unit (Sepblac).

The bank led by Carlos Torres also highlights that the minister made his statement "before reviewing and analyzing the proposal by Ministry technicians."

"BBVA is not aware of any precedent for a Spanish operation where a merger after taking control of a credit institution has not been authorized by Ministry of Economy," assures bank in prospectus; thus considering veto as a "very remote" possibility.