MADRID (Reuters) – Spanish bank BBVA is preparing remedies aimed at obtaining regulatory approval for the takeover of its rival Sabadell “in a few months”, Chief Executive Officer Onur Genc said on Wednesday.
Spain’s competition watchdog CNMC said on Tuesday that BBVA’s hostile bid for Sabadell, initially valued at 12.28 billion euros, was to undergo a review over competitive risks that could prolong the process until 2025.
Since BBVA’s offer was announced on April 29, Sabadell shares have fallen by around 18%, with the offer now valued at around €10 billion.
“We expect the transaction to be approved in the coming months, but we reserve the right to withdraw if the value creation potential is compromised,” Onur Genc said at a banking event.
“(In this case) we will not hesitate for a second,” he said, while adding that the bank’s priority was to finalize the necessary corrective measures to obtain approval.
The increased review could force BBVA to make greater concessions and allow the government, which has opposed the transaction, to intervene, which would mean stricter corrective measures.
Brokerage Kepler Cheuvreux said there was “an increasing risk that the BBVA-Sabadell deal could fail … because Sabadell shareholders may view BBVA’s shares as riskier and less valuable in current conditions”.
Sabadell CEO Cesar Gonzalez-Bueno said at the same event that a longer process would promote transparency.
“The sooner everything is on the table, the better,” he added, highlighting the negative impact of the agreement on loans to small and medium-sized businesses.
On Tuesday, the CNMC said it would deepen its analysis, as both banks are present in the insurance, pensions and asset management markets.
As part of this longer analysis, which takes approximately three months, lenders and third parties can submit opinions.
The CNMC will also request reports from regions where the operation could have a significant impact, such as Catalonia.
(Reporting Jesús Aguado and David Latona; Mara Vîlcu, editing by Kate Entringer)
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