The Spanish National Securities Market Commission (CNMV) announced today the suspension of trading on the Madrid stock exchange for shares of BBVA and Sabadell banks.
This announcement comes as the Spanish Government, following a morning Cabinet meeting, is expected to release its decision regarding BBVA’s takeover bid for Sabadell.
The CNMV stated in a communiqué that it decided to “suspend trading as a precautionary measure, effective immediately,” due to the dissemination of “relevant information.”
The acquisition of Catalan bank Sabadell by the Basque bank BBVA, through a hostile takeover bid, was authorized by Spain’s competition authority at the end of April. However, the Spanish Government may now invoke “general interest” principles to intervene in the process, imposing additional conditions requiring approval by the Cabinet.
On May 6, the Government launched an unprecedented public consultation on BBVA’s prospective acquisition of Sabadell, which concluded on the 16th of the same month, to inform its decision.
This marks the Government’s first such decision concerning a takeover bid, and similarly, the first public consultation on a matter of this nature.
Sabadell opposes the bid, with both the Spanish Government and the Catalan regional government expressing reservations regarding the merger of the two Spanish banks.
Apart from political parties and governments, the takeover bid faced criticism from around 70 business associations and unions.
The Spanish Competition Law of 2007 stipulates that any conditions imposed by the Government must be justified by public interest reasons beyond competition, such as national security, environmental protection, or the promotion of innovation.
On Monday, the European Commissioner for Financial Services, Maria Luís Albuquerque, emphasized that only the European Central Bank (ECB) and Competition authorities have the authority to opine on banking mergers under European regulations.
BBVA initiated the takeover bid almost a year ago.
