The National Commission on Markets and Competition (CNMC) has laid out a strategic plan to scrutinize BBVA’s hostile bid for Sabadell, and this Wednesday a first ruling could be issued. Under the usual review structure, the competition chamber faces three paths: extend the analysis in phase one, approve the deal with commitments from BBVA, or move the review to phase two, which handles more complex cases. People close to the process say that moving to phase two appears the most likely course, barring any unforeseen turns.
If phase two materializes, the process could stretch out considerably and push a final decision toward the second half of 2025, according to analysts and consulting firms. In that frame, the government, which has already shown wariness about the merger, could attach additional conditions beyond those set by the CNMC after phase two. The Competition Defense Act of 2007 authorizes the executive to intervene for general public interest matters outside competition alone, adding a public policy element to the procedure.
This outcome would be welcomed by Sabadell’s leadership, which opposes the merger, and would worry BBVA’s management. In public statements, BBVA has reiterated its confidence that the deal can gain approval in phase one with reasonable commitments to avoid negative impacts on competition, especially in sensitive areas and segments, as seen in prior operations. Sabadell, for its part, argues there are grounds to demand a phase-two review and warns that advancing to that stage could jeopardize the transaction, as has happened in past debates.
Key Pronouncement
The CNMC’s ruling is shaping up to be the decisive factor in whether the operation succeeds or fails. Regardless of the chosen path, the conditions that the CNMC or the Government may impose could deter both BBVA and Sabadell’s current owners from selling. In addition, merger rules allow BBVA to withdraw if the CNMC does not issue a decision within the set deadline or if it conditions the concentration before the end of the offer acceptance period.
The CNMV has hinted that it might wait for the CNMC’s phase-one pronouncement before approving the bid and triggering the shareholders’ acceptance window. Still, doubts persist about whether that stance would hold if the deal shifts to phase two, creating uncertainty about the exact timing of the move.
The Sabadell president, Rodrigo Buenaventura, noted a clash between two public policy goals: on one side, the right of shareholders to decide as soon as possible whether to accept the offer; on the other, the need for competition safeguards that do not distort the deal’s valuation nor restrict the information available to shareholders forming their judgment.
Open Options
Earlier, CNMC president Cani Fernández stated that inspectors act with complete independence and apply technical criteria already established. The prevailing methodology uses a postal-code-by-postal-code analysis of all products and services offered by the entities, a framework devised for the CaixaBank-Bankia operation that emerged as an improvement over a national-level review. While it drew criticism at the time, that framework remains in place for the hostile bid, and now it remains to be seen whether the council will maintain or adjust that criterion given the operation’s specifics.
The CaixaBank-Bankia experience serves as a reference point. That deal was notified in November 2020 and won approval in phase one four months later, subject to the commitments proposed by CaixaBank. It affected markets such as retail banking, corporate banking, investment banking and factoring, as well as cards, payment terminals and ATMs, and included insurance and pension plans. The analysis concluded that the operation posed a threat to competition only in certain areas of the retail banking market, across 86 postal codes where a monopoly or duopoly could arise.
The CaixaBank-Bankia merger offered lessons about how regulators can act, from government intervention mandates to the ability to negotiate remedies that address competition concerns in specific geographic areas. These experiences inform how the BBVA-Sabadell case might unfold, particularly as authorities weigh regional impacts and potential policy interests alongside the strict assessment of market concentration.