(Bloomberg) -- BBVA said on Wednesday it’s committed to protect access to banking services in an effort to convince authorities that its potential takeover of rival Banco Sabadell SA wouldn’t create competition issues.
Spanish antitrust authority CNMC last week extended its assessment of the proposed transaction, effectively reducing BBVA’s chances of succeeding, and said Wednesday it was looking at issues including the risk to financial conditions for small and mid-sized companies.
The measures made public by BBVA on Wednesday included a promise to keep open branches for at least three years after the deal if the combined company doesn’t have others nearby, or if they’re in a low-income neighborhood. It has also vowed to maintain credit conditions for SMEs in areas with a low number of banks for the same period.
BBVA is already one of Spain’s largest banks while Sabadell is particularly strong in Catalonia and Valencia. That has sparked concern, including in the government, that a combination of the lenders could reduce access to essential banking services for consumers and SMEs.
The regulator will now take around three more months and probably longer to come to a final ruling, and it may end up imposing conditions on the deal structure.
BBVA, whose formal name is Banco Bilbao Vizcaya Argentaria SA, in May launched a hostile attempt to acquire Sabadell. Its all-share proposal needs approval from various domestic and international regulators before it can be presented to Sabadell’s investors, with CNMC’s nod being one of the most important.
Onur Genc, the chief executive officer of BBVA, has said the lender may drop the bid altogether if the CNMC were to impose conditions that would render the deal worthless for the bank.
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