BBVA's Bid for Sabadell Delayed Amid Government Review

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00:00Rodrigo, Spins' antitrust watchdog had cleared the offer with some conditions.

00:05So I wonder, how's Madrid justifying its own review?

00:09So they are saying it's about national interest and that gives them the right to look into this.

00:16Legally, they're allowed to do this, but they have certain restrictions

00:19and they can only comment beyond or on top of what the CNMC, the watchdog, said.

00:25They cannot add new factors into their analysis.

00:28The other issue here is whether or not they can argue that this has to do with national security,

00:35not only national interest.

00:37That is a bit harder to imagine, but that is one issue that the parties will be looking at

00:44because BBVA says that legally they can only get involved in issues with national security.

00:49So you have two arguments.

00:50On one hand, they say it's national interest.

00:52On the other hand, you have BBVA saying the law only allows you to step in if you have issues of national security.

00:59So those are the two arguments that are being used right now to justify this.

01:05OK, but if the government does set tougher conditions on a takeover, how much could that limit what BBVA wants to do?

01:12Would it mean that the deal just isn't worth it in the end?

01:14So there are two kind of conditions they can set right now.

01:18On one hand, the one that's pretty clear is that the government has the ability to block the legal merger.

01:24What that means is BBVA could potentially end up buying a stake, even over 50 percent, in Sabadell,

01:30but couldn't actually merge the banks.

01:32It could be just the shareholder, but not the actual owner.

01:35That's something the government can do legally.

01:37And obviously then the question would be, is BBVA interested in being a shareholder and its competitor?

01:43Also, how does that affect competition?

01:45And that's one issue.

01:46BBVA has always said that they are interested and will stay here on the long run.

01:50The other way that this could play out is that the government sets tougher conditions, as you say,

01:56such as higher restrictions on the conditions they have to offer to clients.

02:01And that instead of doing these conditions like the competition regulator asked for three years or five in some cases,

02:07the government says, no, these conditions have to be maintained for 10 or 15.

02:10And that's when BBVA could potentially say, this is too much for me.

02:14The final thing is BBVA could also indicate that, OK, look, we will put money on the table.

02:20We will offer cash to the shareholders.

02:22And that suddenly changes the mood on the Sabadell side.

02:26That has not been floated yet, but it's a trump card everybody has expectations around.