LONDON (Reuters) – Sabadell’s CEO said on Wednesday he did not expect Spain’s competition regulator to come down too hard on BBVA’s hostile takeover bid when it announces the outcome of its review into the proposed deal.
Cesar Gonzalez-Bueno said that the regulator, which will give its view as soon as the end of this month, would not be “very harsh” on BBVA and would likely impose behavioural remedies to approve the offer, rather than structural demands such as asset sales.
BBVA’s CEO Onur Genc said on Tuesday he was confident the competition authority would approve its bid within the next few weeks, stressing that the lender had submitted a long list of remedies to get the deal done.
Spain’s anti-trust watchdog, CNMC, declined to comment.
However, Sabadell’s CEO, said on Wednesday that the offer from its bigger rival was in a “very shaky” state because of political opposition and because the economics did not stack up.
“I think the deal is at a very complex stage and it doesn’t have a very bright future,” Gonzalez-Bueno told the Morgan Stanley European Financials Conference in London, reiterating his view that the deal would consume more capital than BBVA first envisaged and that the predicted synergies from a merger were unachievable.
BBVA has said it could pursue a bid but stop short of a full merger with Sabadell, which would require government approval. Such a scenario would increase the negative cost to its capital, BBVA has said.
The 12.28 billion euro ($13.4 billion) surprise move on Sabadell, announced nearly 11 months ago, would be Spain’s second-biggest banking deal by assets. The government is opposed, saying it will be bad for jobs and competition, particularly in the market for small and medium-sized business lending where Sabadell is a major player.
($1 = 0.9178 euros)
(Reporting by Tommy Reggiori Wilkes; Additional reporting by Jesus Aguado in Madrid; Editing by Iain Withers, Mark Potter and Bernadette Baum)
