The CNMV suspends trading of BBVA and Sabadell

The Government presented its decision on the takeover bid launched by BBVA for Sabadell to the Council of Ministers this Tuesday . The merger was authorized with a new condition: that the two banks remain separate for at least three years. Before the details of the Executive's ruling were known, the market regulator—the National Securities Market Commission (CNMV)—decided to suspend the listing of BBVA and Sabadell on the stock exchange. The stock market authority stated in a statement that the banks' shares were suspended from trading "while relevant information about the banks is disseminated."

At around 12:30 p.m., the CNMV announced the suspension. About an hour later, Economy Minister Carlos Cuerpo appeared at the press conference following the Council of Ministers meeting to announce the decision. Cuerpo said that the Council had authorized the transaction on the condition that the company maintain "the legal personality and assets separate" for three years.

For the moment, the CNMV has not announced when the two banks will resume trading. At the time of the suspension, BBVA shares were up 3% and Sabadell's were up around 1.5%. The president of the stock market supervisor, Carlos San Basilio, advocated yesterday for coordinating with the Ministry of Economy and "surgically" suspending the trading of the two banks until the decision is made public.

The government will impose a new condition on the offer, as both entities must maintain separate legal status and assets for three years. In other words, it imposes a stricter requirement than those previously set by the CNMC , especially with regard to branches and SMEs. Carlos Torres, president of BBVA , stated this Monday at an event in Santander that the bank always has the legal right to withdraw the takeover bid if the conditions imposed are excessive.

Once the Council of Ministers' decision has been made public, BBVA must inform the CNMV and provide new calculations for the offer with the new terms. If the bank decides to move forward with the takeover bid, it will be submitted to the CNMV, which must approve the transaction prospectus. San Basilio announced on Monday that the work is well advanced "with some details still to be finalized" and that it will try to "move as quickly as possible." According to the president of the stock market regulator, authorization could arrive within three weeks.

The Executive's analysis came as a result of the National Markets and Competition Commission (CNMC)'s approval of the transaction in Phase 2, following the commitments submitted by BBVA. This meant that the takeover bid was now in the hands of the Minister of Economy, Carlos Cuerpo, for a period of 15 working days to decide whether to approve it or, on the contrary, submit it to the Council of Ministers, as has indeed occurred.

After an initial analysis and opening a public consultation , the Ministry of the Economy decided on May 27 to submit the proposal to the Council of Ministers for deliberation, allowing the Government as a whole to make its decision on the takeover bid.