Spain clears the CaixaBank–Bankia merger

On 23 March 2021 the National Commission on Markets and Competition cleared, in the first phase and subject to commitments, the takeover merger of Bankia by CaixaBank. The next day, the Ministry of Economic Affairs and Digital Transformation announced that, having received all the reports, it had granted its authorisation by ministerial order. This removes the last administrative obstacle to a deal whose merger plan was signed on 17 September 2020.

CaixaBank expects to complete the transaction on Friday 26 March. The result will be Spain’s largest bank by assets, with around 20 million customers according to the bank itself. For customers of both banks and for the companies that work with them, the merger opens a period of integration of systems, branches and products that will last for months.

The steps of the authorisation

The merger needed several authorisations. The boards of both banks approved the common merger plan on 17 September 2020, and extraordinary general meetings backed it in December: Bankia’s on the 1st and CaixaBank’s on the 3rd. The application to the Ministry was filed on 14 October, and the reports of the Bank of Spain, Sepblac, the CNMV and the Directorate-General for Insurance and Pension Funds came without objections, according to the Ministry itself. The CNMC added the competition review, with commitments.

Merger control assesses whether a transaction could reduce competition in any market. Clearing in the first phase with commitments means that the authority spotted possible problems and resolved them with measures offered by the bank, without opening a second investigation phase. The details of those commitments are published by the competition authority, and companies that depend on financing from both banks should consult them.

The shareholder structure

The approved exchange ratio is 0.6845 new CaixaBank shares for each Bankia share, which includes a 20% premium over the exchange ratio at the close of 3 September 2020. After the merger, the State, which was Bankia’s main shareholder through the FROB, will hold 16.1% of CaixaBank’s capital. That public holding will remain until the FROB decides to divest.

For Bankia’s shareholders, the exchange means becoming CaixaBank shareholders. Under the planned timetable, Bankia would stop trading at the close on 26 March and the new CaixaBank shares would start trading on Monday 29. Minority shareholders will receive the new shares in their securities account without any procedure, but should check the communications from their custodian.

What to review

Companies with financing or services contracted with both banks should review their contracts and limits: after a merger, banks review their total exposure to each client and may rearrange terms, guarantees or credit lines. It is worth speaking to the account manager to learn the integration timetable, possible product overlaps and changes in branches and channels. It is also a good moment to organise the banking documentation and ask in writing for the agreed terms to be maintained.

Those who are Bankia shareholders should pay attention to how the exchange is reflected in their portfolio and tax position: a share exchange in a merger usually has a special tax regime, but this must be confirmed in each case. This information is general in nature and not an investment recommendation.

With authorisation granted, the merger enters its final stretch: the next step is registration in the Commercial Registry.

This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.