BBVA-Sabadell takeover bid: Sánchez resorts to "Speak, people, speak"

BarcelonaWhen Spain regained democracy in the late 1970s, a song became an anthem: "Speak, people, speak[ [Speak, people, speak].] He encouraged citizens to participate in the polls to endorse the law of political reform after 40 years of dictatorship. Well, President Pedro Sánchez, in his speech at the opening of the 40th Annual Meeting of the Economic Circle in Barcelona, ​​​​seems to have recovered that spirit.

Without losing his ability to surprise, the head of the executive has announced that the Spanish government will launch a public consultation to gather the opinions of citizens and businesses on the takeover bid (OPA) by BBVA for Banc Sabadell, which he has described as "hostile."

Since the National Commission on Markets and Competition (CNMC) ultimately endorsed the operation despite finding concentration issues and the minister proposed by Junts, Pere Soler, ended up joining the decision unanimously, Sánchez has opted to ask for the opinions of citizens and businesses. The body only imposed behavioral conditions, not structural ones, such as the sale of parts of the business, as desired by Sabadell and many of the entities that oppose the operation.

Sánchez's announcement satisfied a good portion of the audience that filled the auditorium of the Palacio de Congresos de Catalunya to overflowing, including the presidents of both banks, Josep Oliu (Banc Sabadell) and a surprised Carlos Torres Vila (BBVA), who were in the front row.

With this decision, and to circumvent a unanimous ruling by the CNMC on competition matters, the president of the Spanish government appeals to the criterion of public interest to put spokes in the wheels of an operation that he has not seen favorably from the beginning. The launch of the takeover bid itself, on May 9 of last year, was rejected by all political forces in Catalonia, as it occurred three days before the Catalan elections on May 12.

All kinds of employers' associations and organizations have also objected, such as Foment del Treball and Pimec, the Barcelona Chamber of Commerce, and the College of Economists. Up to 40 organizations were able to submit objections, out of a total of more than 70 that wanted to do so. Fomento, which was not allowed to submit its proposals, has a path forward before the National Court. All these parties involved will surely express their reluctance to a merger that would lose the only major bank currently headquartered in Catalonia, where it decided to return a few weeks ago.

The Ministry of Economy now has 15 business days to decide whether to refer the decision to the Council of Ministers, so the takeover bid still has a long way to go, with several more chapters yet to be written. In fact, some estimate that the outcome might not come until after the summer, while at BBVA, where they greeted the Spanish Prime Minister's announcement with astonishment, they are using the CNMC's decision to argue that "union benefits everyone." We shall see.