Published by Global Banking & Finance Review®
Posted on June 24, 2025
3 min readLast updated: January 23, 2026
Spain delays BBVA and Sabadell merger for three years, imposing conditions to protect jobs and local interests. BBVA may reconsider its bid.
By Jesús Aguado
MADRID (Reuters) -Spain's BBVA will not be allowed to integrate its operations with Sabadell for at least three years as one of the conditions imposed by the Spanish government on its hostile bid for its smaller rival in a potential blow to the suitor's expansion plans.
BBVA, whose CEO said on Monday it could drop its offer if Madrid's terms proved too harsh, said in a statement it would evaluate the conditions set by the government.
Euro zone banking supervisors have called for banking consolidation to strengthen the sector, but deals have been scarce as politicians have sought to preserve jobs, and in the case of cross-border takeover attempts, protect home-grown champions.
"The government has authorised the BBVA and Sabadell deal on the condition that, for the next three years, they remain separate legal entities and maintain separate assets, as well as preserve autonomy in the management of their activities," Economy Minister Carlos Cuerpo told a news conference.
"What we are doing (...) is protecting workers, protecting companies and protecting financial customers," Cuerpo said.
After three years, the cabinet could extend the conditions for another two years, he said.
A spokesperson for Sabadell said that BBVA must analyse and provide information on the impact of these conditions also on the expected synergies, and reiterated Sabadell's intention to stay independent.
At 1515, shares in BBVA were 2.45% up, while Sabadell rose 0.45%.
RBC analysts said in a note that dropping the bid seemed the best solution for BBVA.
"We find it hard to believe that BBVA will be able to generate sufficient synergies to make this deal work on paper. We believe that BBVA should walk away and compensate shareholders for a messy year with a large buyback."
They said other options included sticking with the current offer, or taking the government to court.
Spain's antitrust watchdog, focusing on its competition aspects, has already cleared the deal, now valued at about 14 billion euros ($16.23 billion). Yet, while the European Union has urged Madrid to honour that decision, Spain had the right to impose conditions on grounds of common interest and it has expressed its concerns because of potential job losses.
Cuerpo said the conditions did not block the transaction from coming through and it was now up to BBVA and Banco Sabadell shareholders to decide if they wanted to go ahead.
The new entity will be entitled to seek merger approval once the conditions set on Tuesday have been met.
Under Spanish law, the government cannot stop BBVA from buying its target's shares, but it has the final word at a later stage on whether a merger goes ahead.
($1 = 0.8624 euros)
(Reporting by Jesús Aguado, Emma Pinedo, Inti Landauro in Madrid and Andrés González in London; Editing by David Latona, Andrei Khalip and Tomasz Janowski)
The Spanish government has mandated that BBVA and Sabadell remain separate legal entities for at least three years and maintain separate assets.
BBVA's CEO indicated that the bank could drop its offer if the conditions set by the government prove to be too harsh.
As of the latest update, shares in BBVA were up by 2.45%, while Sabadell saw a rise of 0.45%.
After the initial three years, the cabinet has the option to extend the separation conditions for an additional two years.
RBC analysts noted that dropping the bid might be the best solution for BBVA, as they doubt the bank can generate sufficient synergies to make the deal work.
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