Spain’s competition authority, the CNMC, has conditionally approved the proposed takeover of Banco Sabadell by BBVA, one of the country’s biggest banking mergers in recent years.
The green light comes after an in-depth Phase II investigation and hinges on a series of binding commitments from BBVA designed to ease serious competition concerns flagged across the retail banking and payments sectors.
The CNMC’s decision, announced this week, follows BBVA’s public takeover offer launched in May 2024 and months of scrutiny over the deal’s potential impact on customers—especially in smaller towns, rural areas, and among small businesses.
Major Competition Red Flags
The regulator identified a string of local markets where the merger would give rise to dominant positions or eliminate effective competition altogether. In 96 municipalities, the combined market share would exceed 50%, creating duopoly conditions in half of them. In 72 postal codes, the result would be either a monopoly or a duopoly.
The CNMC also raised concerns about a potential deterioration in payment service conditions, with the merged bank expected to control more than 30% of the national market for acquiring services—used by merchants to process card payments.
The risks flagged include:
- Worse commercial terms for individuals, SMEs, and the self-employed.
- Reduced access to banking services in rural or underserved areas.
- Less credit available to small businesses.
- Possible exclusion of vulnerable customer groups.
- Threats to ATM access and payment service competition.
BBVA’s Remedies
To secure approval, BBVA offered a wide-ranging package of remedies aimed at preserving competition and protecting consumers. These include:
- A dedicated account for vulnerable clients with favorable conditions and clear communication about any changes to services.
- A freeze on commercial conditions for existing clients in affected areas—covering both individuals and small businesses.
- A pledge to keep branches open in over 200 municipalities with lower income levels and limited banking options, as well as a commitment not to close ATMs in certain key locations.
- Credit safeguards for SMEs, including maintaining current lending volumes and not charging more than the national average for new financing.
- Protection of existing payment service terms for small business customers.
Most commitments will remain in place for at least three years, with some credit-related pledges extendable for an additional two years. ATM-related conditions will be monitored for 18 months. The CNMC will supervise compliance throughout.
What’s Next?
The approval isn’t final yet. The case will now be referred to Spain’s Ministry of Economy, Trade, and Business, which can decide whether to escalate it to the Council of Ministers. There, the deal could be assessed under broader public interest criteria beyond competition law.
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