Background on BBVA and Banco Sabadell
BBVA, or Banco Bilbao Vizcaya Argentaria, is a Spanish multinational banking and financial services company headquartered in Madrid. It is one of the largest companies in Spain and ranks among the top 20 global banks by market capitalization. Banco Sabadell, on the other hand, is a Spanish financial conglomerate and the largest savings bank in Spain by market capitalization.
Government’s Decision and Conditions
The Spanish government, through the Ministry of Economy, has approved BBVA’s hostile takeover bid for its competitor Banco Sabadell. However, the government has imposed stricter conditions than initially proposed by the Comisión Nacional de los Mercados y la Competencia (CNMC).
Key Conditions
- Legal and Financial Separation: Both BBVA and Banco Sabadell must maintain their separate legal identities, distinct patrimonies, and autonomy in management for a period of three years. The government has also given the option to extend this duration by an additional two years.
- Evaluation and Extension:
- After three years, the effectiveness of this condition will be evaluated by the Consejo de Ministros.
- The government will then decide whether to extend the duration for an additional two years.
- CNMC Commitments: The government has confirmed the commitments established by the CNMC.
Once these conditions are met, BBVA will decide whether to proceed with the takeover.
Banco Sabadell’s Response
Following the Spanish government’s announcement, Banco Sabadell stated that if BBVA continues with the operation, they will analyze and provide information on the impact of these conditions.
Key Questions and Answers
- What is the nature of the approved takeover? The Spanish government has approved BBVA’s hostile takeover bid for Banco Sabadell.
- What are the strict conditions imposed by the government? The government has mandated that both BBVA and Banco Sabadell maintain separate legal identities, distinct patrimonies, and autonomy in management for a minimum of three years, with the possibility of extending this period by two more years.
- How will the effectiveness of these conditions be evaluated? After three years, the Consejo de Ministros will evaluate the effectiveness of these conditions. Based on this evaluation, they may choose to extend the duration for an additional two years.
- What commitments established by the CNMC have been confirmed?
- What is Banco Sabadell’s stance on the takeover? Banco Sabadell has indicated that if BBVA proceeds with the takeover, they will analyze and provide information on the impact of the imposed conditions.
The Spanish government has confirmed the commitments established by the Comisión Nacional de los Mercados y la Competencia (CNMC), though specific details of these commitments are not provided in the text.
