Spanish Ministry of Economy Launches Public Consultation on BBVA’s Public Takeover Bid for Banco Sabadell, after CNMC Approval with Commitments.
On May 5, the Spanish Ministry of Economy, Commerce and Business received notification of the Spanish Competition Authority’s (“CNMC”) decision to approve BBVA’s public takeover bid for Banco Sabadell. This approval follows a prolonged Phase 2 merger investigation, initiated over a year ago, with the CNMC granting clearance subject to the satisfaction of specific commitments.
The matter now rests with the head of the Ministry, who must determine whether to refer the transaction to the Council of Ministers, opening the so-called Third Phase of the Spanish merger investigation. Under Article 60 of the Spanish Competition Act (“LDC”), the head of the Ministry has 15 working days – until May 27– to make this decision.
Should such referral take place, the Council will have one month to adopt its decision. The Council may either confirm the CNMC’s decision or authorize the underlying concentration, with or without additional conditions. In the latter case, the agreement must be clearly substantiated on general interest grounds other than the protection of competition.1
Within the above framework, the Ministry has decided to initiate an unprecedented public consultation process, with the purpose of gathering views of individuals or legal entities potentially affected by the public takeover bid, either directly or through representative organizations.2 The public consultation allows interested parties to select from the following criteria: national defense and security, protection of public safety or health, free movement of goods and services within the national territory, environmental protection, promotion of research and technological development, ensuring the adequate maintenance of sectoral regulatory objectives, or any other reason unrelated to competition.
In Spain, each ministry may initiate a consultation on draft legislation when it considers it relevant to do so. For example, the Ministry of Labour and Social Economy recently used this tool in relation to the draft Royal Decree Law regulating the special employment relationships of artistic, technical, and auxiliary personnel in the performing arts. Likewise, in September 2024, the Ministry of Housing and Urban Agenda launched a consultation on the Royal Decree regulating short-term rentals, including both temporary and tourist accommodation.
However, this is the first time that this instrument has been used within the framework of a Third Phase in Spain’s merger control regime. Although it shares certain features with a market test, such as the opportunity for third parties to express their views, its purpose is fundamentally different. Rather than focusing on competition concerns, this mechanism aims to identify broader grounds of general interest that might justify government intervention. These considerations can include national security, public health, regional development, or other strategic priorities that extend beyond traditional competition assessments, thereby providing the government with a more comprehensive basis for its final decision.
If the Ministry ultimately decides to refer the case to the Council of Ministers, the Council cannot overturn the CNMC’s approval. However, it retains the authority to impose additional conditions as part of its review. These conditions could significantly impact the transaction’s overall viability, potentially altering its strategic rationale or financial attractiveness, and might even discourage BBVA from proceeding with the bid if deemed too burdensome.
1 As established in Art. 10 LDC.
2 The public consultation period will end on May 16, 2025. Stakeholders may actively participate in the public consultation to help shape the Spanish Government’s decision, and potentially influence the grounds of general interest that are considered in the approval process, by completing the following questionnaire here.
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