The Government approves the merger of Unicaja and Liberbank, which will be ready at the end of July

Manuel Azuaga (left), president of Unicaja, and Manuel Menéndez, CEO of Liberbank, during the presentation of the merger project in December 2020.

Unicaja and Liberbank will complete their merger at the end of this month, as reported by the entities on Monday. They have notified this after receiving the last authorization they needed, that of the Ministry of Economic Affairs and Digital Transformation, which arrived last Friday in the form of a resolution. This morning both have communicated this permission to the supervisor of the Spanish market, the National Securities Market Commission (CNMV) to finalize a process started in 2018, which was broken the following year and ended up curdling in 2020. The resulting bank will have a presence in the 80% of the country and more than 4.5 million clients. It will become the fifth Spanish bank by volume of assets (about 110,000 million euros).

The authorization of the Government, which dates from last Friday, July 16, foresees that the union will take place under the same terms in which it was approved in the respective general meetings that Unicaja and Liberbank held on March 31. This joint project was later authorized by the National Markets and Competition Commission (CNMC) on June 29 with some conditions related to the high concentration of branches that the resulting entity would have in the province of Cáceres. There, the commission believes that the operation poses “a threat to effective competition in the branch market at the provincial level.” To save the problem, Unicaja undertook to warn customers who have contracted Liberbank products and are automatically transferred to Unicaja of possible changes in the conditions of products and services.

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The headquarters of the new entity resulting from the merger – which will be, in addition to being larger, more profitable and efficient than both separately, according to the project presented to investors – will be in Malaga. Unicaja Banco has its domicile there since the union of the Ronda, Antequera, Málaga, Cádiz and Almería savings banks in 1991. However, it will also have operating centers in the Malaga capital, Oviedo – a key aspect for Liberbank – and in Madrid.

The union will be completed in the next few days

Unicaja Banco, with a significant presence in Andalusia and Castilla y León, has a workforce of 6,200 people and a thousand offices. Liberbank, created by Cajastur-Banco CCM and the Caja de Cantabria and Extremadura, has 3,700 workers and 579 branches. The impact of the merger on employment will not be disclosed until the entire process is complete. The financial director of Unicaja Banco, Pablo González, assured last spring that it will be then when the “final impacts” of the union are explained. Of course, the president of Unicaja Banco himself, Manuel Azuaga, had estimated at the end of last year that the restructuring costs will be about 540 million euros, of which 378 million – 70% – will go to the closure of offices and downsizing. In this sense, Comisiones Obreras has expressed its concern about a staff adjustment that some sources estimate between 1,500 and 2,000 employees.

The entities began to negotiate their union in 2018, but in May of the following year they decided to break it, mainly due to the lack of agreement on the percentage that each would have on the resulting one. Until, in the autumn of last year, the pressure to gain profitability in the context of the covid-19 pandemic encouraged both to give themselves a new opportunity in October 2020. Just two months later, on December 29 of last year, Unicaja and Liberbank councils approved the union with a weight in the merged entity of 59.5% for Malaga and 40.5% for Asturian. The agreement also included that Manuel Azuaga, president of Unicaja, would be executive president of the resulting bank and Manuel Menéndez, CEO of Liberbank, will occupy the same position in the resulting entity. Its board of directors will have 15 members.

Both entities have closed the trading day this Monday with losses in the value of their shares. Those of Unicaja have fallen by 1.44% to finish at 0.79 euros. The adjustment for those of Liberbank has been higher, of 2.90%, reaching a price of 0.28 euros per share.

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