(Bloomberg) -- Spain’s competition watchdog is likely to announce it needs more time for a final decision on BBVA’s proposed takeover of Banco Sabadell, which would extend the current takeover battle by several months.
The board of the watchdog, known by its Spanish acronym CNMC, is leaning toward putting the offer through a more thorough assessment known as Phase 2, rather than approving or rejecting it after the current Phase 1, according to people familiar with the matter.
CNMC is likely to announce a decision on November 13 after market close, though the timing could still change, the people said. They asked not to be identified discussing the private deliberations.
A longer wait before BBVA can present its bid to Sabadell’s shareholders is likely a disadvantage as it creates uncertainty. The passing of time “is something that is not good” for the proposed transaction, BBVA Chief Financial Officer Maria Luisa Gomez-Bravo said last week. She also said she expects CNMC to ultimately approve the deal without demanding any “structural remedies.”
Sabadell’s share price reversed some earlier gains on the news and was trading 3.25% higher as of 3:29 p.m. in Madrid.
BBVA, whose official name is Banco Bilbao Vizcaya Argentaria SA, has been immersed since April in a fight to acquire Sabadell against the will of the smaller lender’s management. BBVA has applied with various agencies including CNMC for regulatory approval for its bid, which is required before it can take it to Sabadell’s shareholders.
Sabadell Chief Executive Officer César González-Bueno last week said that the competition issues created by a deal would be “very, very significant.” He also said CNMC would probably end up extending its review of the deal.
A spokesperson for CNMC declined to comment on the potential extension and referred to a previous statement that said the agency “continues working on the analysis of the possible competition problems that the merger operation could create in certain markets.” Representatives for Sabadell and BBVA declined to comment
CNMC started to study the deal on May 31. It can either approve or reject the bid right away at the current assessment stage, called Phase 1, or decide to initiate a a more thorough and more time-consuming assessment known as Phase 2, which would delay the deal. It has previously said it will make a decision on this by the middle of November.
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