Published by Global Banking & Finance Review®
Posted on June 25, 2025
3 min readLast updated: January 23, 2026
Add as preferred source on GoogleBBVA is evaluating its bid for Sabadell amid government conditions. Sabadell may sell TSB, with potential bidders including Santander.
By Jesús Aguado
SANTANDER, Spain (Reuters) -Spain's BBVA will decide shortly whether to move ahead with its hostile bid for Sabadell after reassessing cost savings in light of conditions imposed by the Spanish government, the bank's manager for Spain said on Wednesday.
The government said on Tuesday BBVA would not be allowed to integrate its operations with Sabadell for up to five years as one of the conditions imposed on its roughly 14 billion-euro ($16 billion) bid.
"We'll decide on the additional condition shortly (...) We're in no way keen to delay this process," BBVA executive Peio Belausteguigoitia said.
He added that all options remained on the table - including withdrawing the offer and a potential appeal against the government's verdict.
In the latest twist, Sabadell said last week it had received expressions of interest in its British unit, TSB, which analysts say could be a defensive move to ward off BBVA.
On Wednesday, Sabadell's Chief Executive Officer Cesar Gonzalez-Bueno said the bank would sell TSB if it created value for shareholders. He added that if by then BBVA's offer was still on the table, Sabadell would need shareholders' approval.
Gonzalez-Bueno added Sabadell would only sell TSB if the price was "above market estimates" and that any sale was independent of BBVA's bid.
In 2015, Sabadell bought TSB for 1.7 billion pounds ($2.3 billion). At the end of 2024, TSB had a total equity value of 2.12 billion pounds.
Gonzalez-Bueno said a decision whether to sell TSB would be taken before July 24. He did not give any details about the approaches, but said he did not expect any more.
Santander is among the potential bidders, two people with knowledge of the matter said.
Santander declined to comment. Other potential bidders include Barclays, Bloomberg reported. Barclays declined to comment.
COST SAVINGS TARGET IN DOUBT?
So far, BBVA has signalled that if it kept Sabadell separate it would still be able to generate most of the expected 850 million euros in cost synergies over two years after completing the deal.
Under Spanish law, the government cannot stop BBVA from buying Sabadell shares, but it has the final word on whether a merger goes ahead. That has raised the possibility BBVA could end up with a majority stake without an outright merger, jeopardising expected synergies.
"Most of the synergies will come from the IT area and we are now analysing the decision from the government," Belausteguigoitia said.
The government has said that neither bank could reduce staff or close branches in the event of a merger.
At 1444 GMT, BBVA's shares were down 2.7%, and Sabadell's down 2%.
Citi said in a note that it did not expect the government's decision to prevent BBVA from launching a tender offer.
Sabadell's CEO said that the "lower the synergies BBVA can extract from the deal, the less room it has to sweeten the offer," while adding that the chances of BBVA's bid succeeding had diminished since the government's decision was announced.
($1 = 0.8618 euros)
($1 = 0.7346 pounds)
(Reporting by Jesús Aguado. Additional reporting by Emma Pinedo and by Lawrence White, Amy-Jo Crowley and Andres Gonzalez in London. Editing by David Latona, Elaine Hardcastle and Mark Potter)
BBVA will soon decide whether to proceed with its hostile bid for Sabadell after reassessing cost savings due to government-imposed conditions.
The government has stated that BBVA cannot integrate its operations with Sabadell for up to five years following the acquisition.
Sabadell's CEO indicated that the bank would only sell TSB if it creates value for shareholders and if the price exceeds market estimates.
Potential bidders for TSB include Santander and Barclays, although both banks have declined to comment on the matter.
As of the latest update, BBVA's shares were down 2.7%, while Sabadell's shares decreased by 2%, reflecting market uncertainty.
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