BBVA Tender Offer for Banco Sabadell against the General Interest

This article is jointly signed by Pere Aragonès, Artur Mas, Ximo Puig, Antoni Castells, Jaume Giró, Oriol Junqueras, Andreu Mas-Colell, Natàlia Mas Guix and Vicent Soler, all of whom –with the exception of Mr Puig and Mr Soler– are former ministers of the Economy of the Generalitat (Government) of Catalonia. Pere Aragonès and Artur Mas are also former presidents of the Generalitat of Catalonia. Ximo Puig is former president of the Generalitat of Valencia, and Vicent Soler is former minister of Finance and Economic Model of the Generalitat of Valencia.

The takeover bid by the bank BBVA for 100% of the capital of Banco Sabadell with the aim of an eventual absorption merger has been referred to the Council of Ministers. This opens a decisive period of assessing the impact of the takeover, which will require rigorous analysis as there is much at stake.

This is an unusual operation involving two solvent, profitable, and consolidated entities with no apparent financial or structural problems which, from the standpoint of public interest, might justify such a takeover. It is not a rescue or restructuring move for reasons of systemic stability, as has been the case with other recent mergers in the banking sector.

Beyond the corporate interests of the acquiring entity, and in addition to the competition assessment already carried out by the National Markets and Competition Commission (CNMC), an operation of this scope requires careful analysis of its social, territorial, and economic effects on the productive sector and citizens.

Numerous business entities, chambers of commerce, and unions, especially in the Mediterranean region, have expressed strong opposition to the takeover bid, and have warned of possible serious consequences for public interest. In this regard, we would like to highlight five key points.

1. Employment and territorial cohesion

The impact on employment would be very severe. It would mean the loss of as many as 10,000 direct jobs and, counting subcontracts and affected small and medium-sized enterprises (SMEs), an overall total of up to 31,000. More than 70% of job losses would be concentrated in Catalonia. Moreover, the experience of previous mergers shows that real layoffs tend to exceed estimates. As for territorial cohesion, the takeover would worsen the already existing imbalance. There is no need to concentrate more economic power in Madrid. On the contrary, it should be deconcentrated.

2. Financial exclusion and less access to services

Closing as many as 800 branches would particularly affect zones with a low density of branches, like many Catalan and Valencian regions—especially Alicante—and the Balearic Islands, thus further aggravating inequality in access to financial services. In just fifteen years, we have changed from a model with many entities, and especially savings banks, to one with very few. Concentration has already happened and there is no need to take it any further.

3. Loss of support for SMEs

Banco Sabadell keeps strategic links with a network of SMEs, while the BBVA is more oriented towards large companies and global markets. The merger would concentrate 60% of bank lending in just three entities, which would mean a reduction of competition and financing options for SMEs. The crisis of 2008 left no doubt that that most vulnerable companies were those with the least banking diversification. Not only does the Mediterranean axis concentrate a high density of SMEs but it also acts as the state’s great export centre. Damaging this business network would mean weakening the Mediterranean economy and, with it, the Spanish economy as a whole.

4. Territorial uprooting of capital

Banc Sabadell generates 85% of its net interest margin (NIM) in Spain, while the figure for BBVA is less than 30%. The merger would entail a territorial uprooting of capital and weaker links between the financial system and the needs of the local productive network. It would also reduce the number of workers in the proximity economy and the ability to turn to public debt issuance, which would reduce the depth of the sovereign market. In a situation where economic sovereignty and strengthening of local capital are strategic, the takeover bid is working in the opposite direction.

5. Systemic risks

Large-scale bank mergers concentrate power and entail structural risks that can undermine the stability of the system. When an entity becomes “too big to fail”, moral hazard and the possibility of public bailouts are more likely. This interaction then transfers private risks to citizens. A diversified banking system is needed, one with real competition and also regulation aiming at stability and protecting the public interest.

The Spanish government must therefore analyse the takeover bid with the maximum rigour and from the perspective of general interest. In several European countries, public authorities have imposed conditions on, or blocked, similar operations. In Italy, the stipulations applied to the merger of Unicredit and BPM have obliged its reconsideration.

Europe needs a strong Banking Union and a truly integrated internal market. What should be promoted are cross-border mergers that would produce entities of a truly European dimension, instead of increasing concentration within the borders of a single country. In Spain, the absence of competition has had clear consequences: poorly remunerated deposits and more expensive credit for families and enterprises.

For all these reasons, we believe that the BBVA’s takeover bid for Banco Sabadell is contrary to the public interest. In both national and European legislation, the Council of Ministers has instruments designed to protect this interest.

This is no mere acquisition of shares but an operation that could mean the loss of Banco Sabadell’s autonomy as an independent entity. The implications far exceed the corporate domain. There are real risks for employment, territorial cohesion, and access to finance for SMEs, especially in the regions of the Mediterranean arc. The recovery of economic decision-making centres in Catalonia would also be seriously affected if Banco Sabadell is lost. This is a time for clear action and institutional responsibility. If we want a more accessible, plural, and resilient banking system, this takeover bid must be studied with the utmost care, transparency and diligence.