Spain’s Competition Authority Signals Deeper Review of BBVA’s Sabadell Bid

Spain’s National Markets and Competition Commission (CNMC) has indicated it may need to initiate a more thorough examination of BBVA’s €12 billion ($13.4 billion) hostile bid to acquire Sabadell, its smaller banking competitor. The takeover, first proposed in April and turned hostile by BBVA in May, has met opposition from the Spanish government, raising questions about its path to regulatory approval, according to Reuters.

The CNMC began reviewing the deal in June, initially within the standard one-month Phase 1 framework, during which a straightforward decision on the acquisition was anticipated. However, given the complexity of the merger and concerns surrounding market competition, an extension to Phase 2 is now under consideration. This second phase typically involves a more in-depth analysis that can last up to three months and often imposes additional regulatory conditions or corrective measures on transactions of this scale. According to Reuters, if the CNMC proceeds with this option, the extended review could allow for increased government oversight, potentially complicating BBVA’s acquisition plans.

A spokesperson for CNMC stated that any decisions, including the opening of a Phase 2 review, would be publicly communicated as soon as they are finalized. However, deadlines in either review phase can be extended if authorities request further information, which could add additional layers of scrutiny to an already complex transaction.

Related: Spain’s BBVA Faces Lengthy Antitrust Review in Hostile Sabadell Takeover Bid

While the European Central Bank granted its approval for the merger on September 5, final authorization rests with Spanish authorities, as stipulated by Spanish law. As such, the CNMC’s review and the government’s position will be crucial in determining the fate of BBVA’s bid.

Analysts suggest that a more extensive review could signal potential hurdles for BBVA, including the possibility of new regulatory conditions aimed at mitigating the competitive impact of the merger. The takeover would consolidate BBVA’s position in Spain’s banking sector, sparking concerns over market dominance—a factor that could influence CNMC’s decision.

Source: Reuters