Banks Bbva and UniCredit under Government Scrutiny, Pairing up similarly in Operations on Sabadell as well
Spain's BBVA Takeover of Banco Sabadell: A Tough Road Ahead Despite Regulatory Approval
The ongoing takeover of Banco Sabadell by BBVA, reminiscent of UniCredit's move in Italy, faces a formidable challenge as it navigates the Spanish government's Golden Power. The Spanish administration, firm in its opposition, might potentially cause a legal uproar, casting doubt on the proposed deal's success.
Tracing back nearly a year, BBVA, a prominent Spanish banking giant with a market cap of approximately 72 billion euros, laid its sights on the smaller Banco Sabadell (valued at 14 billion euros).
Regulatory Green Light, but Political Resistance
- Competition Commission's Verdict: Spain's National Markets and Competition Commission (CNMC) granted its approval for BBVA's acquisition of Sabadell in late April 2025, following a drawn-out second-phase review. The decision came with stipulations from BBVA, including the preservation of banking services and branches in select regions, support for SME lending, and maintaining service continuity for Sabadell clients [1][4].
- European and Other Regulatory Approvals: Besides the CNMC, the transaction has been cleared by 27 regulatory bodies, including the European Central Bank (ECB) [3].
Market Analysis
- Non-Essential Status of Sabadell: According to the CNMC, Sabadell is not a fundamental or indispensable player in Spain's banking sector, particularly for Small and Medium Enterprises (SMEs). The commission declared that the market remains competitive, and Sabadell's market share in SME lending has been on a downward trend [4].
Political Obstacles
- Government's Unyielding Opposition: despite regulatory approval, the Spanish government persists in its opposition to the takeover. The executive, empowered by the "Golden Power" or special intervention rights in strategic sectors such as banking, is preparing for a potential legal battle to block the deal [2].
- Upcoming Decision: The government is anticipated to make its final determination at a cabinet meeting scheduled for June 24, 2025. Additional conditions and hurdles may be imposed if the executive chooses not to exercise a full veto but opts for alternative regulatory measures [2].
Overview
The takeover has surmounted essential regulatory hurdles, yet the Spanish government's deployment of the Golden Power remains a significant unpredictability. A final decision lies ahead, with growing tension between BBVA and the Spanish administration shaping the stage for potential showdowns [2][3][4].
| Aspect | Status/Details ||-----------------------|-------------------------------------------------------------------------------|| Regulatory Approval | CNMC (and 26 other bodies) approved with conditions[1][3][4] || Political Stance | Government opposes, preparing for legal clash; final decision in June 2025[2] || Sabadell’s Market Role| Not deemed essential; sufficient competitors exist[4] |
BBVA, after receiving regulatory approval from the Competition Commission, European Central Bank, and 26 other bodies for its takeover of Banco Sabadell, now faces a political challenge from the Spanish government. Regardless of the CNMC's decision that Sabadell is not a fundamental player in Spain's banking sector, particularly for Small and Medium Enterprises, the Spanish administration remains unyielding in its opposition to the deal, preparing for a potential legal battle to block the transaction.
