Spanish Government Approves BBVA’s €14 Billion Sabadell Bid With Three-Year Merger Ban Amid TSB Sale to Santander for €3.4 Billion

The Spanish government has authorized BBVA's €14 billion takeover bid for Banco Sabadell but imposed strict conditions, including a prohibition on merging the two banks for at least three years. The National Securities Market Commission (CNMV) temporarily suspended the trading of BBVA and Sabadell shares pending the government's decision on the takeover bid. The government requires both banks to maintain separate legal identities, independent management, and protect jobs during this period. BBVA is currently evaluating whether to proceed with the offer under these new terms and has not ruled out withdrawing the bid or pursuing legal action.

Meanwhile, Banco Sabadell has agreed to sell its UK subsidiary, TSB Bank, to Banco Santander for approximately £2.65 billion (around €3.4 billion or $3.6 billion). This sale, which includes a planned extraordinary dividend of €3.8 billion to Sabadell shareholders, is seen as complicating BBVA's takeover attempt. Sabadell's management insists the TSB sale is independent of the BBVA bid, but the move adds pressure to the ongoing hostile acquisition process. Sabadell has called two shareholder meetings for August 6 to approve the TSB sale and the extraordinary dividend. The Bank of Spain has stated it has no role in the TSB sale or its impact on BBVA's takeover bid. Analysts suggest BBVA may need to improve its offer to Sabadell shareholders in light of these developments. The situation remains fluid, with BBVA seeking investor support to continue the bid and Sabadell shareholders facing a tense summer amid competing corporate actions.