On Tuesday, Spain’s competition watchdog, CNMC (Comisión Nacional de los Mercados y la Competencia), had approved Valencia-based Caixabank’s $5.2 billion takeover deal of state-backed lender Bankia with conditions, paving ways to create the largest Spanish domestic lender having had assets worth of more than €650 billion.
Nonetheless, Spanish competition watchdog had also added that the merged entity would have to maintain a number of conditions on its retail banking unit, however, the merger would not have to divest any of its assets, said CNMC.
In point of fact, latest remark from Spain’s competition watchdog came forth roughly six months after Caixabank had agreed to a €4.3 billion takeover deal to purchase Bankia on September last year.
CNMC approves Caixabank-Bankia merger with conditions
Nevertheless, according to a CNMC statement released earlier in the day, the Spanish competition watchdog was quoted saying that an analysis had unfurled a merger of Caixabank and Bankia would result in a lack of competitiveness in retail banking on at least 86 postal codes across Spain, while Caixabank would enjoy a complete monopoly in 21 of those regions.
In order to address such rogue-cuts in the country’s retail banking sector, CNMC had deterred Caixabank’s ability to alter the terms and conditions for existing Bankia customers on those regions for at least three years.
Among other compensations, Caixabank would not be allowed to close any of its offices without CNMC’s authorization in the areas that lacked competitiveness, largely in a bid to offset the risks of financial exhaustion, CNMC added at its statement.
The $5.2 billion Caixabank-Bankia merger deal, which is expected to be concluded by end-March, would also require an approval of the country’s economy minister following a review of Spanish alongside European supervisors.