BBVA begins to rethink the OPA on Banco Sabadell, once he had decided to maintain it and move on despite the Conditions imposed by the Government through the Ministry of Economy and Commerce of Carlos Body. He now admits that the 850 million euros in savings and synergies promised by the operation are in the air in the event that the Executive continues to maintain the blockade for 5 years. That is why, so in a document that has sent to the CNMV (National Securities Market Commission) the entity has made it clear that everything will depend on the position that the government maintains and that the expected benefits could be left at all.
These benefits included include cost reduction, synergies and financing after absorption, as published Europa Press. This is collected in the statement that the bank has sent to the CNMV where they affirm that “it cannot be assured that some or all the expected benefits are achieved with the operation that would be 450 million for technology and administration, 300 for savings of personnel and 100 million per financing.”
BBVA, however, has sent a message of tranquility to the market, pointing out that “the operation remains attractive in the non -merger scenario,” as Carlos Torres said after the last Shareholders’ Board because most of it would be achieved since it comes from technology, systems and other general administrative expenses.
The document indicates that, if the merger is finally vetoed, “a good part” of the benefits are volatilized and the process could end in a “complex” and “more expensive” integration.
The risks accumulate
The Bank has detailed that the integration of operating systems could be “difficult and complex” notifying litigation, customer losses or personnel problems and reputational damage in the event that the offer does not come to consolidate. “The impossibility of liquidating the offer could negatively affect the reputation of BBVA and generate adverse reactions in customers and investors.”
Now, even if BBVA gets that the OPA on Sabadell goes ahead, the final fusion must have the approval of who is Minister of Economy at that time. If there is no approval, the integration may eternalize and the bank is forced to operate for years with two parallel structures, multiplying costs and causing other problems.