National bank mergers have to come before cross-border deals, the vice-president of the European Central Bank Luis de Guindos said on Friday, without elaborating if the ECB would approve BBVA's takeover bid for domestic rival Sabadell.
Earlier this week, BBVA (BBVA.MC) asked the ECB to authorise its more than 12 billion euro ($13 billion) hostile bid for Sabadell (SABE.MC).
"Fundamentally, what we believe creates a European banking market is cross-border mergers, but sometimes, in order to get to cross-border you have to do national ones," De Guindos told Spanish radio station Onda Cero, when asked about BBVA's Sabadell bid.
BBVA's all-share offer was rejected by Sabadell last month, prompting Spain's second-largest bank to go hostile in its latest attempt to buy the country's fourth-largest lender after a failed attempt in 2020.
Combining the two banks would create a lender with more than 1 trillion euros in total assets and mark the latest consolidation Spanish banking.
Spain's anti-trust watchdog said on Tuesday that BBVA had sought approval for the Sabadell deal, a potential tie-up that the Spanish government has said it opposes.
On Friday, De Guindos said that the ECB's job was not to do a review based on competition as that belongs to other authorities, such as Spanish anti-trust watchdog CNMC or even the Directorate General for Competition in Brussels.
"That is not for us."
De Guindos also said that the ECB would only analyse the potential deal from the "solvency angle."
BBVA has offered one newly issued BBVA share for every 4.83 in Sabadell, representing a premium of 30% over Sabadell's April 29 closing price of 1.73750 euros, valuing the bank at slightly above 12.2 billion euros. On that day, BBVA closed at 10.9 euros.
BBVA wants to issue 1.126 billion new shares, which at current market prices of 9.804 euros, would value Sabadell at around 11 billion euros, 6% higher than now.
