Unicaja Banco and Liberbank They are reviewing the last fringes of the most relevant aspects that are part of the common merger agreement and it is foreseeable that they will take the final step towards their integration in the coming weeks, financial sources have reported
Both entities are already in the final phase of a process whose preliminary contacts were confirmed at the beginning of last October after the announcement of the union between CaixaBank and Bankia to create the largest bank in Spain.
A few days later, the boards of directors of Unicaja Banco and Liberbank decided to formally resume the talks to negotiate a possible consolidation operation, at which point They gave the external advisers a mandate to start the “due diligence” phase (legal audit), during which they exchanged information and had access to their respective books.
Those in charge of preparing the audit have been PwC and Deloitte, while the chosen advisers have been Uría Menéndez and Mediobanca on the side of Unicaja Banco, and Ramón y Cajal and Deloitte on the side of Liberbank.
Is about the same advisers who were mandated during the previous attempt to merge the two entities, which they resigned in May 2019 after not reaching an agreement on the exchange ratio. However, different sources familiar with the negotiation consulted by Europa Press have reported that the process, on this occasion, indicates that it will go “well”.
Exchange equation, key
The exchange equation is one of the main unknowns in this type of transaction, since determines the controlling interest of each entity in the resulting group. In these valuations there are also imponderable and subjective variables that could tip the balance in favor of one or the other.
Now, once the analysis has advanced and about to close certain questions, the respective leadership will have to meet to decide whether to approve the transaction, something that could happen at any time.
If favorable, the operation would give rise to the fifth largest entity by volume of assets in Spain (the merger between CaixaBank and Bankia has already materialized), by adding 108,826 million euros (63,002 million from Unicaja Banco and 45,824 million from Liberbank, according to data from June 2020).
The combined entity would have a workforce of 9,972 employeesos (6,274 from Unicaja Banco and 3,698 from Liberbank) and a network of 1,608 branches (1,029 from Unicaja and 579 from Liberbank).
Improve efficiency and profitability
Merger operations are one of the ways that banks can gain scale, improve efficiency and increase profitabilityThese are very important elements in a context marked by interest rates at historic lows and by the effects of the coronavirus crisis, which many analysts and organizations anticipate will lead to an increase in non-performing loans in the sector.
Along these lines, it is foreseeable that the potential group resulting from the merger between the Andalusian entity and the Asturian entity will lead to overlaps in the commercial network and, therefore, in excess capacity, which will have to be resolved through office closures and a restructuring process in the template.
The president of Unicaja Banco, Manuel Azuaga, undertook during the shareholders ‘meeting that took place on October 28 that any measure affecting the workforce will be carried out respecting legal procedures and in consultation with the workers’ representatives.
Concern among unions
A union representative intervened in the shareholders’ meeting to ask about the labor measures that the entities could adopt after the merger, asking the president for a declaration of intent not to use traumatic measures for the template.
Azuaga assured that “it is practice” for the entity to carry out all the work activitiesl «respecting the legally established procedures in each case and especially with regard to consultation with the workers’ representatives ”.