Spanish government greenlights BBVA's takeover bid for Banc Sabadell

The Spanish government approved BBVA’s takeover bid for Banc Sabadell on Tuesday but imposed stricter conditions on the acquisition.

For three years, the banks must maintain separate legal identities and assets, as well as autonomy in managing their day-to-day operations.

According to Spain's economy minister Carlos Cuerpo, this means “autonomous decision-making, especially regarding financing and credit for small and medium-sized businesses, branch offices, and human resources.”

In practice, this measure prevents a full merger for the next three years, meaning BBVA cannot lay off Banc Sabadell employees and must maintain existing financing conditions for SMEs throughout that period.

The new conditions make the takeover more challenging by calling its feasibility into question. BBVA had announced synergies of €850 million, which are now expected to be significantly reduced under these new terms.

BBVA will now analyze the new conditions to decide whether to proceed with the operation.

Carlos Torres, president of BBVA, for the first time on Monday, hinted at the possibility of withdrawing the takeover bid.

“If the takeover bid does not go ahead, it will not be a failure. It is not a transformative operation that we need to maintain the success we currently have,” Torres said.

The announcement came shortly after the Spanish stock market regulator suspended trading of both banks’ shares, a move that foreshadowed the news.

Catalan president Salvador Illa welcomed the conditions imposed by the Spanish government, stating that they "guarantee balanced competition and protect the rights of workers, clients, and companies."

In a post on X, Illa said the Spanish government had put "the general interest above all," acting with "scrupulous and transparent respect for the rules and timelines."

“Catalonia is experiencing a strong economic moment, offering confidence and the right environment to host business projects that generate prosperity,” he added.