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 capacity, including the presidents of both banks, Josep Oliu (Banco 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 he has not viewed favorably from the outset. The launch of the takeover bid, 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, and up to 40 organizations that were able to submit objections, out of a total of more than 70 that wanted to do so. Foment del Treball, which was not allowed to submit its proposals, has recourse before the National Court. Surely all these parties involved will 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 take 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 may not come until after the summer, while at BBVA, where they received the Spanish Prime Minister's announcement with astonishment, they are citing the CNMC's decision to argue that "the union benefits everyone." We shall see.