MADRID (Reuters) -The public consultation launched by the Spanish government over the proposed acquisition of Banco Sabadell by its larger rival BBVA is expected to last seven business days, Economy Minister Carlos Cuerpo said on Tuesday.
The government opposes the hostile takeover bid, currently worth over 13 billion euros ($14.75 billion) and rejected by Sabadell, which does much of its business in the wealthy northeastern region of Catalonia, on concerns it could reduce competition and lead to job losses.
Prime Minister Pedro Sanchez announced on Monday that the government would open a process to gather the views of citizens and businesses on the bid, an unprecedented move for such deals.
“This is a process that will conclude on May 16, with the aim of gathering information from all affected parties,” Cuerpo told journalists in Barcelona.
Some observers say the government’s consultation is a further sign of political opposition to the deal.
Last year, Catalonia’s regional leader Salvador Illa – from Sanchez’s Socialist Party – became head of the Catalan government, ending more than a decade of separatist governance.
Spain’s centre-left minority coalition faces a balancing act in every vote as it weighs concessions to several other parties from across the spectrum that support it on a vote-by-vote basis and which have often opposing demands, such as pro-Catalan independence Junts.
“Whether the opposition to the transaction can maintain its momentum is yet to be seen, but given the fragile political equilibrium we would not underestimate Sanchez’s political instinct for survival to once again find a way to salvage his presidency,” London-based firm MKP Advisors said in a note.
The consultation, which is non-binding, is expected to run in parallel to the 15 business days – until May 27 – the Economy Ministry has to take the deal to a cabinet meeting after the CNMC’s authorisation last Wednesday.
“This process will be based on common interest and is different to competition criteria (from the CNMC),” Cuerpo said.
The government then has a month to make a final decision whether or not to approve the deal with or without conditions.
Under Spanish law, the government cannot stop a bid from being made, but it has the final word on whether a merger goes ahead.
BBVA has not disclosed how many jobs would be cut, only saying it will close 300 branches.
As part of its targeted 850 million euros in cost savings, BBVA has said that 450 million euros would be administrative and IT savings, 300 million euros related to job cuts and 100 million euros in funding savings.
($1 = 0.8812 euros)
(Reporting by Jesús Aguado; Editing by Emelia Sithole-Matarise)
