BBVA withdrew its appeal to the Supreme Court against the conditions imposed on Banco Sabadell by the government, once the operation failed. The bank headed by Carlos Torres informed the Supreme Court last month, November 26, that it had decided to leave the appeal in the case of the Council of Ministers in which it was founded a year ago without effect, and a condition was added to the process, requiring it to maintain legal and financial independence and in the management of both entities within three years, expandable to more.
This condition means that BBVA cannot promote a merger between both banks, make any losses in the deal or close offices, among other issues. The OPA carpet led to the government table, which was open from the beginning to the deal, although the National Commission for Market and Competition (CNMC) allowed the deal while imposing a series of obligations to guarantee, among other things, credit for the gemstones, maintain commercial conditions in certain scenarios or avoid the closure of workshops in vulnerable areas.
CNMC delayed the analysis of the transactions by 11 months, so its study moved to the second phase. The Government explained that, according to the law of jurisdiction, it is assumed that the conditions imposed on the institution headed by Cane Fernández can be expanded or reduced by the executive authority to protect the public interest. I am of the opinion of the BBVA, which has always advocated that the executive’s job is to maintain or relax these requirements. In July, he decided to file a lawsuit, filing an appeal with the Supreme Court.
“BBVA asserts that it abandoned the appeal to the Supreme Court since its main goal was to abolish the status of the Cabinet, which lost its validity and did not succeed in the prosperity of the OPA,” Hahn pointed out to the bank’s sources of Vasco origin. After 17 months of operation, BBVA had only achieved acceptance of 25% of capital from Sabadell, which is why the acquisition was completed on October 16.
According to legal sources, BBVA indicated in its recent writing addressed to the Supreme Court that the main reason for withdrawing its appeal is that the decision fell without effect and, therefore, it is not necessary to resolve the technical and legal issue that will be discussed, if the Council of Ministers has the authority to tighten the requirements to give the green light to a possible merger of companies. Therefore, the bank’s defense made clear its position that the performance of the executive authority was not consistent with the rules.
Throughout the process, Ministry of Economy sources stressed that the Council of Ministers acts “at all times” in line with national regulations, evaluating state law reports and taking into account the participation and competencies of all relevant institutions. Of course, the Minister of the Chapter, Carlos Cuerbo, indicated on several occasions that Moncloa had been ceñido “exclusively” and “in a very strict way” that allowed this to be said. According to its interpretation, the regulation recognizes not only the possibility of the executive authority to impose additional conditions taking into account the public interest, but also those approved by competence.
That is why the European path in this case remains valid. The European Commission has warned Spain against interfering with the BBVA opa. Now a method has begun, and is still underway, to analyze whether Spanish regulations violate European treaties. Specifically, research in Brussels focuses, on the one hand, on government intervention in the second phase of CNMC licensing. On the other hand, in the Bank Merger Law, which allows the Council of Ministers to prohibit a transaction of this type.