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

BarcelonaWhen Spain regained democracy in the late 1970s, a song became an anthem: "Habla pueblo habla" ("The People Speak, They Speak"), encouraging citizens to participate in the polls to approve the political reform law after 40 years of dictatorship. Well, President Pedro Sánchez, in his speech at the opening of the 40th Annual Economic Circle Meeting 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 BBVA's hostile takeover bid for Banc Sabadell.

Given that the National Commission on Markets and Competition (CNMC) ultimately endorsed the operation despite finding concentration issues and that the minister proposed by Junts, Pere Soler, ultimately joined 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 packed auditorium at the Catalonia Conference Centre, which included 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 Spanish Prime Minister is appealing to the criterion of public interest to put obstacles in the way of an operation that he has not viewed favorably from the outset. The launch of the takeover bid itself, on May 9 of last year, was rejected by all political forces in Catalonia, as it took place three days before the regional elections on May 12 in Catalonia.

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, and up to 40 organizations that were able to submit arguments 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. Surely all these parties involved will express their reservations about a merger that would lose the only major bank currently headquartered in Catalonia, where it decided to return a few weeks ago.

In the takeover bid, on which the Ministry of Economy has 15 business days to decide whether to submit the decision to the Council of Ministers, there is still a long way to go, several more chapters to be written. In fact, some estimate that the outcome might not come until after the summer, while at BBVA, which has received the Spanish Prime Minister's announcement with astonishment, it is citing the CNMC's decision as a defense that "union benefits everyone." We shall see.