Spain’s leftist government on Tuesday postponed any merger between banking giant BBVA and rival Sabadell for three years, complicating a hostile takeover bid that could create a new sector colossus.
The cabinet approved the takeover provided that “for three years both companies maintain separate legal entities and assets, as well as independence in the management of their activity”, said Economy Minister Carlos Cuerpo.
Both banks will have to remain autonomous in terms of financing and credit, human resources and their network of branches and services, he explained at a news conference.
Cuerpo said the “proportionate and balanced” decision sought to protect “general interest criteria”, including finance for small and medium-sized businesses, protecting the workforces, territorial cohesion, social policies and promoting research and technological development.
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The government can decide to extend the new conditions for another two years depending on how they affect the identified criteria, Cuerpo added.
The Socialist-led coalition government had previously expressed competition concerns over the hostile takeover bid, which would create a behemoth capable of rivalling European competitors HSBC and BNP Paribas.
Although it could not block the transaction, it had the power to impose restrictions that could make BBVA desist.
BBVA, Spain’s second-biggest bank with an important footprint in Latin America and Turkey, launched its bid in May 2024.
The European Central Bank gave its green light in September that year and Spain’s competition authority approved the operation under certain conditions in April.
Sabadell’s leadership is determined to maintain the independence of Spain’s fourth-biggest bank, while small and medium-sized businesses as well as consumer associations in its northeastern Catalonia region feared a resultant loss of branches and jobs.
