Alex Trelinski
THE BBVA bank is going to the Supreme Court to challenge the Spanish government’s pre-conditions for its hostile takeover of Sabadell Bank.
The legal challenge was filed on July 15 but only became public on Thursday.
The European Commission last month opened a probe into whether the government acted properly over its demands.
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The government’s terms to green light the merger is that the two banks will have to operate as separate entities and with different management teams for three years- extendable for two more.
BBVA has accused the government of ‘meddling’ and that it has no right to impose any conditions on a potential takeover.
Meanwhile, Sabadell has been fighting back recently by raising cash through the sale of its UK subsidiary, TSB to Santander, resulting in a €2.5 billion dividend windfall to shareholders, who will ultimately decide on a BBVA takeover.
Legal experts say the Supreme Court action has no impact on the takeover bid and add that if the judges rule in BBVA’s favour, that might even help it.
The government’s decision on June 22 severely tightened the conditions for a takeover which had been approved pretty much without any strings by the CNMC competition watchdog in late April.
The changes came after a public consultation and pressure from Catalunya groups, where Sabadell is based.
This included employers associations and trade unions, as well as regional political parties upon which Prime Minister, Pedro Sanchez, relies on in Congress to pass legislation and keep him in power.
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Despite whatever outcome grom the Supreme Court and all the platitudes we’ve seen from BBVA about their intentions once merged, we all know that in reality it will mean further branch closures and job losses. Otherwise there would be little or no reduction in overheads. But ask yourself a simple question: when was the last rime you had to visit the branch of your bank ? Maybe liss of branches will not be a big deal.
What customers of both banks need now is a clear message about what benefits of the merged bank will come their way.