Sabadell presents its conditions for the BBVA takeover bid to the Competition Court this Wednesday.

BarcelonaBanco Sabadell will submit the documentation for the market test on the takeover bid (OPA) launched by BBVA on May 9th of last year to the National Markets and Competition Commission (CNMC) this Wednesday. The tenderers have filed complaints, including Pimec, Conpymes, and Cepyme, while around thirty others, including Foment del Treball, UGT, CCOO, the Barcelona Chamber of Commerce, and the College of Economists of Catalonia, have been excluded.

The information submitted to the CNMC is confidential, but it's no secret that the top management of Banc Sabadell is strongly opposed to its competitor's proposal. In any case, from the outset, it has demanded that the model used to carry out the takeover of Bankia by CaixaBank not be applied to the analysis of the potential merger. The CNMC's resolution must include the requirements (remedies, in technical terminology) that BBVA should comply with in the event of a merger, which could involve the sale of offices, the transfer of credit portfolios and others.

In the case of BBVA's transaction with Sabadell, credit and financing for SMEs are heavily involved, so another way of studying the proposed merger is needed. One of the proposals Sabadell has put forward is to require that, in the event of a merger, the combined SME credit market share of both entities be maintained at least in the case of those that depend on more than 20% of the combined financing from both banks. This is an idea put forward by Sabadell's CEO, César González-Bueno, who adds that the protection should be maintained for at least five years, as explained in an interview with Efe news agency.

Although, according to Sabadell, it would be ideal to require the sale of credit portfolios to SMEs in certain territories, given the possibility that the CNMC might choose to accept the commitments proposed by BBVA, an alternative could be to require the maintenance of the financing currently provided to SMEs that significantly depend on both banks. Industry sources believe it's relatively easy to obtain this data, since banks are required to send monthly information to the Bank of Spain's Central Risk Information System (Cirbe).

The parties that may be considered involved in this process and that the CNMC has asked for their opinion had ten days to respond. Once this market test is completed, the Competition Directorate must decide whether it needs more information from the parties or not, which could stop the clock again.

But if the procedure is successful, it will submit the report to the chamber, which must debate it and may revise or approve it directly. The final resolution will ultimately reach the Ministry of Economy, which could open a phase 3, which entails the Council of Ministers having the final say, something the market assumes.