Spanish Government Approves BBVA’s €14 Billion Sabadell Takeover Bid With Three-Year Merger Ban and Job Protection

The Spanish government has authorized BBVA's €14 billion takeover bid for Banco Sabadell but imposed strict conditions that require the two banks to operate as separate entities for at least three years, effectively blocking an immediate merger. The National Securities Market Commission (CNMV) temporarily suspended the trading of BBVA and Sabadell shares pending the government's decision on the takeover offer. The government’s conditions include maintaining the legal and operational independence of both banks, protecting jobs, preserving branch networks, and supporting small and medium-sized enterprises (SMEs), rural populations, and financial inclusion. This intervention has complicated BBVA's acquisition plans, delaying anticipated synergies estimated at €850 million and prompting BBVA to reassess the viability of the offer.

BBVA is evaluating whether to proceed with the bid, potentially increasing the offer, withdrawing it, or pursuing legal action against the government’s restrictions. Banco Sabadell has requested BBVA to disclose detailed plans regarding synergies and shareholder remuneration following the imposed conditions. Meanwhile, Banco Santander has submitted a binding offer of approximately €2.7 billion for Sabadell's British subsidiary, TSB Bank, intensifying competition amid the ongoing acquisition saga. Despite the regulatory hurdles and political backlash, BBVA has confirmed it will continue with the takeover bid while consulting investors to gauge support. The government's intervention is seen as a move to protect the financial ecosystem, including the Social Security system, and to prevent drastic job cuts, but it has introduced uncertainty over the future of the deal and the broader banking consolidation landscape in Spain.