Spanish Government Approves BBVA’s €14 Billion Bid for Sabadell With Three-Year Merger Ban and CNMV Suspension Lifted

The Spanish government has authorized BBVA's €14 billion ($16 billion) takeover bid for Banco Sabadell but imposed strict conditions that prohibit the immediate merger of the two banks. The government requires BBVA and Sabadell to operate as separate entities with independent legal personalities, separate assets, and autonomous management for at least three years. Additional stipulations include protecting jobs, maintaining branch networks, and focusing on financing small and medium-sized enterprises (SMEs), financial inclusion for the elderly and rural populations, and avoiding drastic workforce reductions. The National Securities Market Commission (CNMV) temporarily suspended the trading of BBVA and Sabadell shares pending the government's decision but later lifted the suspension after the ruling.

BBVA is currently evaluating the impact of these conditions and has not ruled out withdrawing the offer or pursuing legal action, including a potential Supreme Court challenge. Sabadell has requested BBVA to clarify its plans and the expected synergies following the government's intervention. The imposed restrictions have sparked debate among analysts and stakeholders about the viability of the takeover and its strategic benefits, with some viewing the government's stance as a political move or a significant obstacle. Meanwhile, Banco Santander has submitted a binding offer of approximately €2.69 billion for Sabadell's British subsidiary, TSB Bank, adding further complexity to the ongoing banking sector developments in Spain. BBVA's management is consulting investors to gauge support for continuing the bid under the new conditions, with the decision expected imminently.